Jeanniebe Construction Company has used the cost recovery method of accounting since it began operations in...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Jeanniebe Construction Company has used the cost recovery method of accounting since it began operations in 2000. In 2003, for justifiable reasons, management decided to adopt the percentage-of-completion method. The following schedule, reporting income for the past 3 years, has been prepared by the company. 2000 Income Total revenues from completed 25,000,000 42,000,000 40,000,000 contracts Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 Less: Cost of completed contracts 18,000,000 29,000,000 28,000,000 Income from operations 7,000,000 13,000,000 12,000,000 Extraordinary loss 0 (2,000,000) 7,000,000 13,000,000 10,000,000 Analysis of the accounting records disclosed the following income by contracts, earned in the years 2000-2002 using the percentage-of-completion method. 2000 2001 2001 0 2002 7,000,000 5,000,000 8,000,000 3,000,000 7,000,000 1,000,000 2002 2,000,000 6,000,000 (1,000,000) What should be the cumulative effect of change in accounting policy that should be reported in 2003 statement of retained earnings? (Ignore income tax) Jeanniebe Construction Company has used the cost recovery method of accounting since it began operations in 2000. In 2003, for justifiable reasons, management decided to adopt the percentage-of-completion method. The following schedule, reporting income for the past 3 years, has been prepared by the company. 2000 Income Total revenues from completed 25,000,000 42,000,000 40,000,000 contracts Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 Less: Cost of completed contracts 18,000,000 29,000,000 28,000,000 Income from operations 7,000,000 13,000,000 12,000,000 Extraordinary loss 0 (2,000,000) 7,000,000 13,000,000 10,000,000 Analysis of the accounting records disclosed the following income by contracts, earned in the years 2000-2002 using the percentage-of-completion method. 2000 2001 2001 0 2002 7,000,000 5,000,000 8,000,000 3,000,000 7,000,000 1,000,000 2002 2,000,000 6,000,000 (1,000,000) What should be the cumulative effect of change in accounting policy that should be reported in 2003 statement of retained earnings? (Ignore income tax)
Expert Answer:
Answer rating: 100% (QA)
What should be the cumulative effect of change in accounting policy that shoul... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
Students also viewed these accounting questions
-
The Long Island Construction Company has used the completed contract method of accounting for construction contracts. At the beginning of 2011, the company decides to change to the...
-
The Peach Corporation uses the cost recovery method of recognizing revenue. It has accumulated the following related information: Sale of property under cost recovery method ........ $50,000 Cost of...
-
The Pyramid Construction Company has used the completed-contract method of accounting for construction contracts during its first two years of operation, 2009 and 2010. At the beginning of 2011,...
-
(d) Consider a straight wire of length 1, and cross sectional area A, carrying a current I, in a uniform magnetic field B. The angle between the direction of current flow and the magnetic field is 0....
-
E*TRADE and Ameritrade offer Internet stock-trading services at a very low price compared to traditional brokers. Both companies have been growing very rapidly in recent years. What internal and...
-
Explain the typical grievance process.
-
The following transactions for Liberty Tire, Co., occurred during October: Requirements 1. Journalize the transactions on the books of Liberty Tire, Co. 2. What was Liberty Tires gross profit for the...
-
Are some beer, wine, or spirits ads misleading? What examples can you give? What is misleading in them? Do some ads contain images and themes that go too far in appealing to an audience under the...
-
Question If U is the set of all multiples of 3 less than 20, and M = {3, 12, 18}, find Mc (the complement of M). Express your answer as a set in the roster form: i.e. {a, b, c...}. Provide your...
-
1. Evaluate Theo's new strategy in light of the company's strengths, weaknesses, opportunities, and threats. 2. Using the BCG matrix, explain Theo's decision to offer a classic line of chocolate bars...
-
In the figure, which determinants of the price elasticity of supply do S, S, and S depict? Correct Answer(s) Price the flexibility of producers change in income Incorrect Answer(s) Drog appropriate...
-
Equipment is to be depreciated using the units of use method with a preset unit total of 11 000. The equipment was in production from: 1 December 2021 to 30 November 2022, producing 2500 units 1...
-
Hemophilia is an X-linked recessive disorder in humans. If a heterozygous woman has children with an unaffected man, what is the probability of each of the following combinations of offspring? A. An...
-
Demand is elastic when ______. a) percentage change in price is greater than percentage change in quantity b) percentage change in quantity is greater than percentage change in price c) the demand...
-
Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd = 9% as long as it finances at its target capital structure, which calls for...
-
\(\$ 20\) million of nondealer real estate obligations arose in and are outstanding at the end of calendar-year 2018. Deferred gross profit on such installment obligations equals \(\$ 5\) million....
-
A company identifies a potential security risk with the implementation of a new system. After assessing the risk, the company decides to halt the deployment and not to proceed with the system s...
-
Frontland Advertising creates, plans, and handles advertising campaigns in a three-state area. Recently, Frontland had to replace an inexperienced office worker in charge of bookkeeping because of...
-
What is a worksheet? How does the use of a worksheet facilitate the completion of the accounting cycle?
-
In January 2007 Cordova Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of $215,000, was paid for as follows: Down payment...
-
Does recording depreciation generate funds for the replacement of the asset? Explain.
-
Solve Problem 33 with \(A=2 \mathrm{~cm}\).
-
Solve Example 3.20 where the structure has viscous damping, that is, the governing equation of motion is \(\ddot{x}+2 \zeta \omega_{n} \dot{x}+\omega_{n}^{2}=F(t)\), the forcing \(F(t)\) is the same...
-
An undamped system is forced by the periodic function shown in Figure 3.62. Derive the Fourier series representation for this function, and solve for the response assuming zero initial conditions. FO...
Study smarter with the SolutionInn App