Sheridan Inc., a real estate development company, used to account for its long-term contracts using the contract completed before 2018 method. In 2018, it switched to the percentage completion method.

The company decided to use it for income tax purposes. The enacted tax rate is 40%. Pre-tax income under both methods for the past three years is listed below.

		2016		2017		2018
completed contract		$415000		$279000		$143000
Percentage of completion		715000		347000		235000

What amount will be debited to the Construction in Progress account, to register the change at the beginning of 2018?

Answer rating: 100% (QA)

To register the change in accounting method at the beginning of 2018 the company needs to adjust the ... View the full answer