On January 1, 2024, Hampton's Construction, Inc. decided to change from the completed-contract method of accounting to the percentage-of-completion method. Hampton will continue to use the completed-contract method for income tax purposes. The following information is available for net income. The income tax rate for all years is 35%.Net Income Year Ended Percentage of Completion Completed Contract December 31, 2022 $145,000 $125,000 December 31, 2023 179,000 159,000 December 31, 2024 267,000 181,000 What is the journal entry to record the change in accounting principle on January 1, 2024? Group of answer choices Retained Earnings 55,900 Deferred Tax Asset 30,100 Construction in Progress86,000 Construction in Progress 40,000 Retained Earnings 40,000 No entry needed. Construction in Progress 40,000 Deferred Tax Liability 14,000 Retained Earnings26,000
On January 1, 2024, Hampton's Construction, Inc. decided to change from the completed-contract method of accounting to the percentage-of-completion method. Hampton will continue to use the completed-contract method for income tax purposes. The following information is available for net income. The income tax rate for all years is 35%.Net Income Year Ended Percentage of Completion Completed Contract December 31, 2022 $145,000 $125,000 December 31, 2023 179,000 159,000 December 31, 2024 267,000 181,000 What is the journal entry to record the change in accounting principle on January 1, 2024? Group of answer choices Retained Earnings 55,900 Deferred Tax Asset 30,100 Construction in Progress86,000 Construction in Progress 40,000 Retained Earnings 40,000 No entry needed. Construction in Progress 40,000 Deferred Tax Liability 14,000 Retained Earnings26,000
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 47P: How do the all events and economic performance requirements apply to the following transactions by...
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Question
On January 1, 2024, Hampton's Construction, Inc. decided to change from the completed-contract method of accounting to the percentage-of-completion method. Hampton will continue to use the completed-contract method for income tax purposes. The following information is available for net income. The income tax rate for all years is 35%.
Net Income
What is the journal entry to record the change in accounting principle on January 1, 2024?
Net Income
| Year Ended | Percentage of Completion | Completed Contract |
| December 31, 2022 | $145,000 | $125,000 |
| December 31, 2023 | 179,000 | 159,000 |
| December 31, 2024 | 267,000 | 181,000 |
| | | |
Group of answer choices
Construction in Progress86,000
Retained Earnings26,000
| 55,900 | |
| 30,100 |
| Construction in Progress | 40,000 | |
| Retained Earnings | | 40,000 |
No entry needed.
| Construction in Progress | 40,000 |
| 14,000 |
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