At the beginning of 2024 , a construction company that began operations in 2022 changed...
70.2K
Verified Solution
Link Copied!
Question
Accounting
At the beginning of 2024 , a construction company that began operations in 2022 changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes. Gross profit figures under both methods for the past three years appear below: The company reports two years of comparative statements. Assuming an income tax rate of 20% for all years, the effect of this accounting change on prior periods after taxes should be reported by a credit of $616000 on the 2024 income statement. $356000 on the 2023 retained earnings statement. $896000 on the 2023 income statement. $896000 on the 2024 retained earnings statement
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
At the beginning of 2024 , a construction company that began operations in 2022 changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes. Gross profit figures under both methods for the past three years appear below: The company reports two years of comparative statements. Assuming an income tax rate of 20% for all years, the effect of this accounting change on prior periods after taxes should be reported by a credit of $616000 on the 2024 income statement. $356000 on the 2023 retained earnings statement. $896000 on the 2023 income statement. $896000 on the 2024 retained earnings statement 