On January 1, 2025, Blossom Corporation changed to the percentage-of-completion method of income recognition. This change is justified by Blossom Corporation. On December 31, 2024, Blossom's Retained Earnings balance was $1620000. Blossom calculated that, if the percentage-of-completion method had been used, the accumulated impact on net income (before taking into consideration any income tax effects) would have been an additional $320000. If Blossom's income tax rate is 25%, one of the impacts of this accounting change would be O a decrease to the Retained Earnings balance on December 31, 2024, of $320000. O an increase to the Retained Earnings balance on December 31, 2024, of $320000. O an increase to Construction in Progress of $320000 on December 31, 2024. O an increase to Construction in Progress of $1620000 on December 31, 2024.
On January 1, 2025, Blossom Corporation changed to the percentage-of-completion method of income recognition. This change is justified by Blossom Corporation. On December 31, 2024, Blossom's Retained Earnings balance was $1620000. Blossom calculated that, if the percentage-of-completion method had been used, the accumulated impact on net income (before taking into consideration any income tax effects) would have been an additional $320000. If Blossom's income tax rate is 25%, one of the impacts of this accounting change would be O a decrease to the Retained Earnings balance on December 31, 2024, of $320000. O an increase to the Retained Earnings balance on December 31, 2024, of $320000. O an increase to Construction in Progress of $320000 on December 31, 2024. O an increase to Construction in Progress of $1620000 on December 31, 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A1
![On January 1, 2025, Blossom Corporation changed to the percentage-of-completion method of income recognition. This change is
justified by Blossom Corporation. On December 31, 2024, Blossom's Retained Earnings balance was $1620000. Blossom calculated
that, if the percentage-of-completion method had been used, the accumulated impact on net income (before taking into consideration
any income tax effects) would have been an additional $320000. If Blossom's income tax rate is 25%, one of the impacts of this
accounting change would be
O a decrease to the Retained Earnings balance on December 31, 2024, of $320000.
O an increase to the Retained Earnings balance on December 31, 2024, of $320000.
O an increase to Construction in Progress of $320000 on December 31, 2024.
O an increase to Construction in Progress of $1620000 on December 31, 2024.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F624b77e9-cad4-4825-9e8d-bc7fefaec930%2Fd4acd92f-b300-4bef-99d1-8df2fc8a1728%2F6dcwlwn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2025, Blossom Corporation changed to the percentage-of-completion method of income recognition. This change is
justified by Blossom Corporation. On December 31, 2024, Blossom's Retained Earnings balance was $1620000. Blossom calculated
that, if the percentage-of-completion method had been used, the accumulated impact on net income (before taking into consideration
any income tax effects) would have been an additional $320000. If Blossom's income tax rate is 25%, one of the impacts of this
accounting change would be
O a decrease to the Retained Earnings balance on December 31, 2024, of $320000.
O an increase to the Retained Earnings balance on December 31, 2024, of $320000.
O an increase to Construction in Progress of $320000 on December 31, 2024.
O an increase to Construction in Progress of $1620000 on December 31, 2024.
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