Please help.Thank you **Accounting Change Example: Recognizing Revenue Over Time**At the beginning of 2020, Martinez 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 $117,000, and completed-contract $78,390. The tax rate is 20%.Prepare Martinez’s 2020 journal entry to record the change in accounting principle. (**Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.**)**Account Titles and Explanation**| **Account Titles and Explanation** | **Debit** | **Credit** ||------------------------------------|-----------|------------|| Investment Revenue | | || Deferred Tax Liability | | || Retained Earnings | | |This example includes a table that requires the completion of a journal entry by specifying the appropriate account titles and the corresponding debit and credit amounts depending on the change in accounting principle from the completed-contract method to the percentage-of-completion method. The goal is to illustrate how such a change affects the financial records and reporting for the company. Please note, further information such as specific amounts for the debit and credit sections should be calculated based on the pretax income differences and the respective tax implications.

Because of the change in accounting principle from the completed-contract method to the…

ion 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 $117,000, and completed-contract $78,390. The tax rate is 20%. Prepare Martinez's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Account Titles and Explanation Investment Revenue Deferred Tax Liability Retained Earnings Debit Credit

ion 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 $117,000, and completed-contract $78,390. The tax rate is 20%. Prepare Martinez's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Account Titles and Explanation Investment Revenue Deferred Tax Liability Retained Earnings Debit Credit

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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