Question: Wertz Construction Company decided at the beginning of 2010 to
Wertz Construction Company decided at the beginning of 2010 to change from the completed contract method to the percentage-of-completion method for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2010, pre-tax income under the two methods was as follows: percentage-of-completion $120,000, and completed contract $80,000. The tax rate is 35%. Prepare Wertz’s 2010 journal entry to record the change in accounting principle.
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