Intermediate Accounting II

Bus $203$

Spring $2025$

Accounting Changes and Financial Statement Analysis

REVIEW

Valley View Furniture began operations on January $1,2022.$ In $2024,$ the company changed from the completed$-$contract method to the percentage$-$of$-$completion $($POC$)$ method for financial reporting purposes $($for tax purposes the company will continue to use the completed$-$contract method$).$

An analysis of pretax income for $2022,2023$ and $2024$ is shown below:

$\backslash$table$[[$Year$,$POC,Completed Contract,Difference$],[2022,$$$200,000,$$$160,000,$$$40,000$