Brlef Exercise 22-02 At the beginning of 2020, Riverbed Construction Company changed from the completed-contract method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows percentage-of-completion $117,300, and completed-contract $77,700. The tax rate is 35%. Riverbed has a profit-sharing plan, which pays all employees a bonus at year-end based on 1% of pretax income. Compute the indirect effect of Riverbed's change in accounting principle that will be reported in the 2020 income statement, assuming that the profit-sharing contract explicitly requi adjustment for changes in income numbers. Indirect effect

Brlef Exercise 22-02 At the beginning of 2020, Riverbed Construction Company changed from the completed-contract method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows percentage-of-completion $117,300, and completed-contract $77,700. The tax rate is 35%. Riverbed has a profit-sharing plan, which pays all employees a bonus at year-end based on 1% of pretax income. Compute the indirect effect of Riverbed's change in accounting principle that will be reported in the 2020 income statement, assuming that the profit-sharing contract explicitly requi adjustment for changes in income numbers. Indirect effect

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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