ion Company changed from the completed-contract method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows: percentage-of-completion $117,000, and completed-contract $78,390. The tax rate is 20%. Prepare Martinez's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Account Titles and Explanation Investment Revenue Deferred Tax Liability Retained Earnings Debit Credit
ion Company changed from the completed-contract method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows: percentage-of-completion $117,000, and completed-contract $78,390. The tax rate is 20%. Prepare Martinez's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) Account Titles and Explanation Investment Revenue Deferred Tax Liability Retained Earnings Debit Credit
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 44P
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