Hampton's Construction, Inc. decided to change from completed-contract method of accounting to percentage-of-completion method. The following...
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Hampton's Construction, Inc. decided to change from completed-contract method of accounting to percentage-of-completion method. The following information is available for net income. Ignore income tax effects: Net Income Percentage of ComRietion $145,000 185,000 Year Ended December 31, 2014 Completed Contract $125,000 154,000 180,000 December 31, 2015 December 31, 2016 201.000 What is the journal entry to record the change in accounting principle on January 1, 2016? OA. Construction in Progress Retained Earnings Prior Period Adj. O B. No journal entry needed for prospective application of the change in principle. Account Debit Credit 51,000 51.000 Oc. Account Debit Credit Construction in Progress Deferred Tax Liability 51,000 51,000 O D. Retained Eamings - Prior Period Adj. Construction in Progress Account Debit Credit 72,000 72,000 Hampton's Construction, Inc. decided to change from completed-contract method of accounting to percentage-of-completion method. The following information is available for net income. Ignore income tax effects: Net Income Percentage of ComRietion $145,000 185,000 Year Ended December 31, 2014 Completed Contract $125,000 154,000 180,000 December 31, 2015 December 31, 2016 201.000 What is the journal entry to record the change in accounting principle on January 1, 2016? OA. Construction in Progress Retained Earnings Prior Period Adj. O B. No journal entry needed for prospective application of the change in principle. Account Debit Credit 51,000 51.000 Oc. Account Debit Credit Construction in Progress Deferred Tax Liability 51,000 51,000 O D. Retained Eamings - Prior Period Adj. Construction in Progress Account Debit Credit 72,000 72,000
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Hamptons Construction has decided to change its method of accounting from Completed Contract method ... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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