Question
Wertz Construction Company decided at the beginning of 2014 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 2014, pretax income under the two methods was as follows: percentage-of-completion $142,800, and completed-contract $75,200. The tax rate is 33%.
Prepare Wertz’s 2014 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
List Of Accounts
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Brief Exercise 22-1
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Account Titles and Explanation |
Debit |
Credit |