The effect from the change in the accounting method on management compensation to identify it as direct or indirect effect of change. Also, determine the report of financial statement. Given information: Tax rate is 35%. Cumulative income would have been $550,000 higher if percentage of completion method was used. Management team is compensated with 2% bonus on reported earnings before tax.

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Answer 1

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Chapter 21, Problem 21.6BE

To determine

The effect from the change in the accounting method on management compensation to identify it as direct or indirect effect of change. Also, determine the report of financial statement.

Given information:

Tax rate is 35%.

Cumulative income would have been $550,000 higher if percentage of completion method was used.

Management team is compensated with 2% bonus on reported earnings before tax.

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Innovative Products operations for the year produced a margin of safety (M/S) ratio of 30% and a contribution margin (C/M) ratio of 60%. The company's fixed costs amounted to $75,000. Compute and interpret the following: Contribution Provide answer

Answer 2

Question

Chapter 21, Problem 21.6BE

To determine

The effect from the change in the accounting method on management compensation to identify it as direct or indirect effect of change. Also, determine the report of financial statement.

Given information:

Tax rate is 35%.

Cumulative income would have been $550,000 higher if percentage of completion method was used.

Management team is compensated with 2% bonus on reported earnings before tax.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 21, Problem 21.6BE

To determine

The effect from the change in the accounting method on management compensation to identify it as direct or indirect effect of change. Also, determine the report of financial statement.

Given information:

Tax rate is 35%.

Cumulative income would have been $550,000 higher if percentage of completion method was used.

Management team is compensated with 2% bonus on reported earnings before tax.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 21, Problem 21.6BE

To determine

The effect from the change in the accounting method on management compensation to identify it as direct or indirect effect of change. Also, determine the report of financial statement.

Given information:

Tax rate is 35%.

Cumulative income would have been $550,000 higher if percentage of completion method was used.

Management team is compensated with 2% bonus on reported earnings before tax.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 21, Problem 21.6BE

To determine

The effect from the change in the accounting method on management compensation to identify it as direct or indirect effect of change. Also, determine the report of financial statement.

Given information:

Tax rate is 35%.

Cumulative income would have been $550,000 higher if percentage of completion method was used.

Management team is compensated with 2% bonus on reported earnings before tax.

Answer 6

Chapter 21, Problem 21.6BE

To determine

The effect from the change in the accounting method on management compensation to identify it as direct or indirect effect of change. Also, determine the report of financial statement.

Given information:

Tax rate is 35%.

Cumulative income would have been $550,000 higher if percentage of completion method was used.

Management team is compensated with 2% bonus on reported earnings before tax.

Answer 7

Chapter 21, Problem 21.6BE

To determine

The effect from the change in the accounting method on management compensation to identify it as direct or indirect effect of change. Also, determine the report of financial statement.

Given information:

Tax rate is 35%.

Cumulative income would have been $550,000 higher if percentage of completion method was used.

Management team is compensated with 2% bonus on reported earnings before tax.

Answer 8

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Answer 11

Ch. 21 - Are accounting changes permitted in financial...Ch. 21 - How do firms report accounting changes under the...Ch. 21 - Prob. 21.3Q Ch. 21 - How do firms account for changes in accounting...Ch. 21 - Prob. 21.5Q Ch. 21 - Prob. 21.6Q Ch. 21 - Prob. 21.7Q Ch. 21 - Prob. 21.8Q Ch. 21 - Do accounting errors that self-correct within two...Ch. 21 - Does a firm need to correct an error that...

Solution Summary: The author explains the accounting principles that govern accounting procedures. Compensation expenses are debited, and bonuses are credited.

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