Concord Construction Company changed from the cost-recovery to the percentage-of-completion method of accounting for long- term construction contracts during 2026. For tax purposes, the company employs the cost-recovery method and will continue this approach in the future. (Hint: Adjust all tax consequences through the Deferred Tax Liability account.) The appropriate information related to this change is as follows. Pretax Income from Percentage-of-Completion Cost-Recovery Difference 2025 $856,000 $615,000 $241,000 2026 780,000 507,000 273,000 (a) Assuming that the tax rate is 35%, what is the amount of net income that would be reported in 2026? Net income +A $
Concord Construction Company changed from the cost-recovery to the percentage-of-completion method of accounting for long- term construction contracts during 2026. For tax purposes, the company employs the cost-recovery method and will continue this approach in the future. (Hint: Adjust all tax consequences through the Deferred Tax Liability account.) The appropriate information related to this change is as follows. Pretax Income from Percentage-of-Completion Cost-Recovery Difference 2025 $856,000 $615,000 $241,000 2026 780,000 507,000 273,000 (a) Assuming that the tax rate is 35%, what is the amount of net income that would be reported in 2026? Net income +A $
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 21CE
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Transcribed Image Text:Concord Construction Company changed from the cost-recovery to the percentage-of-completion method of accounting for long-
term construction contracts during 2026. For tax purposes, the company employs the cost-recovery method and will continue this
approach in the future. (Hint: Adjust all tax consequences through the Deferred Tax Liability account.) The appropriate information
related to this change is as follows.
Pretax Income from
Percentage-of-Completion
Cost-Recovery
Difference
2025
$856,000
$615,000
$241,000
2026
780,000
507,000
273,000
(a)
Assuming that the tax rate is 35%, what is the amount of net income that would be reported in 2026?
Net income
+A
$
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