Wasatch Corp, a real estate company, accounted for its long-term contracts using the completed contract method prior to 20X8. In 20X8, it changed to the percentage-of-completion method. The company’s tax rate is 40%. Income before income tax under both methods for the past three years is reported below. 20X6 20X7 20X8 Completed contract $450,000 $300,000 $150,000 Percentage-of-completion 750,000 375,000 270,000 What amount will be DEBITED to the Construction in Process account, to record the change at the beginning of 20X8? a) $375,000. b) $150,000. c) $225,000. d) $ 75,000.

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.