Question: Talia Construction Company Ltd changed from the completed contract to the

Talia Construction Company Ltd. changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2011. For tax purposes, the company uses the completed-contract method and will continue this approach in the future. Talia follows ASPE. The appropriate information related to this change is as follows:
(a) Assuming that the change qualifies as a change in accounting policy and that the tax rate is 35%, calculate the net income to be reported in 2011.
(b) Provide the necessary entry(ies) to adjust the accounting records for the change in accounting policy.
(c) If this change was made to reflect changed circumstances, how should the change be accounted for?

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  • CreatedAugust 23, 2015
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