Blossom Home Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2024. In 2024, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 20%. Income before taxes under both the methods for the past three years appears below. Completed contract Percentage-of-completion 2022 2023 $385000 $261000 685000 323000 2024 A credit to Retained Earnings for $219280 O A debit to Retained Earnings $289600 A credit to Retained Earnings for $289600 A debit to Retained Earnings for $219280 $137000 205000 Which of the following will be included in the journal entry made by Blossom Home to record the income effect after taxes?

Blossom Home Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2024. In 2024, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 20%. Income before taxes under both the methods for the past three years appears below. Completed contract Percentage-of-completion 2022 2023 $385000 $261000 685000 323000 2024 A credit to Retained Earnings for $219280 O A debit to Retained Earnings $289600 A credit to Retained Earnings for $289600 A debit to Retained Earnings for $219280 $137000 205000 Which of the following will be included in the journal entry made by Blossom Home to record the income effect after taxes?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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