Cherokee Construction Company changed from the cost-recovery to the percentage-of-completion method of accounting for long-term construction contracts
Question:
Cherokee Construction Company changed from the cost-recovery to the percentage-of-completion method of accounting for long-term construction contracts during 2010. For tax purposes, the company employs the cost-recovery method and will continue this approach in the future.
Instructions
(a) Assuming that the tax rate is 35%, what is the amount of net income that would be reported in 2010?
(b) What entry (ies) is necessary to adjust the accounting records for the change in accountingpolicy?
Transcribed Image Text:
Pretax Income from: 2009 2010 Percentage-of-Completion $780,000 700,000 Cost-Recovery Difference $170,000 220,000 $610,000 480,000
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 54% (11 reviews)
a The net income to be reported in 2010 using the retrospective a...View the full answer
Answered By
JAPHETH KOGEI
Hi there. I'm here to assist you to score the highest marks on your assignments and homework. My areas of specialisation are:
Auditing, Financial Accounting, Macroeconomics, Monetary-economics, Business-administration, Advanced-accounting, Corporate Finance, Professional-accounting-ethics, Corporate governance, Financial-risk-analysis, Financial-budgeting, Corporate-social-responsibility, Statistics, Business management, logic, Critical thinking,
So, I look forward to helping you solve your academic problem.
I enjoy teaching and tutoring university and high school students. During my free time, I also read books on motivation, leadership, comedy, emotional intelligence, critical thinking, nature, human nature, innovation, persuasion, performance, negotiations, goals, power, time management, wealth, debates, sales, and finance. Additionally, I am a panellist on an FM radio program on Sunday mornings where we discuss current affairs.
I travel three times a year either to the USA, Europe and around Africa.
As a university student in the USA, I enjoyed interacting with people from different cultures and ethnic groups. Together with friends, we travelled widely in the USA and in Europe (UK, France, Denmark, Germany, Turkey, etc).
So, I look forward to tutoring you. I believe that it will be exciting to meet them.
3.00+
2+ Reviews
10+ Question Solved
Related Book For
Intermediate Accounting
ISBN: 978-0470616314
IFRS edition volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Question Posted:
Students also viewed these Accounting questions
-
Cherokee Construction Company changed from the cost-recovery to the percentage-of-completion method of accounting for long-term construction contracts during 2019. For tax purposes, the company...
-
Pam Erickson Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2008. For tax purposes, the...
-
Cullen Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2008. For tax purposes, the company...
-
Write a check (Figure 4 - 42) dated June 13, 20XX, to Byron Johnson in the amount of $296.83 for a washing machine, Complete the check stub. Figure 4 - 42 456 456 Amount To For KRA, INC 2596 Jason...
-
Describe how the RTS threshold works.
-
In Problems 6164, find the standard form of the equation of each circle. Center (3, 1) and tangent to the y-axis
-
What documents should you attempt to obtain before a lawsuit is filed during the informal fact-gathering stage? What sources are available to you to locate these documents?
-
Refer to Exercise 3-27A. Requirements 1. Use the data in the partial worksheet to prepare Winwood Production Company's classified balance sheet at December 31 of the current year. Use the report...
-
you will design and implement a ESP IDF-based IoT system that uses Amazon Alexa voice control to either lock or unlock the "set time" functionality of a ESP32-based embedded system that has a keypad,...
-
On 1 July 20x2 Parent Ltd acquired 100% of the issued shares of Subsidiary Ltd. Extracts from the Financial Statements of each entity as at 30 June 20x3 are presented below. Subsidiary Ltd $ Rent...
-
Palmer Co. is evaluating the appropriate accounting for the following items. 1. Management has decided to switch from the FIFO inventory valuation method to the average cost inventory valuation...
-
Whitman Company began operations on January 1, 2008, and uses the average cost method of pricing inventory. Management is contemplating a change in inventory methods for 2011. The following...
-
Some Congress members think the government should not risk taxpayer money to rescue financial firms whose highly paid executives have behaved irresponsibly. Instead, the government should aid middle-...
-
Discuss the viability of amateurism in the United States today. Is it possible, given the attention that elite athletes receive, to have pure amateurs?
-
The 2020 coronavirus pandemic not only impacted and killed millions of people but also caused a dramatic decrease in utilization of primary care. The Boise Medical Group (BMG) in Idaho serves 10...
-
Is discrimination by referees best characterized as employer discrimination, employee discrimination, customer discrimination, or none of these? Explain your reasoning.
-
Under what circumstances would an owner be able to practice employer discrimination over a long period of time?
-
Are head football and basketball coaches worth the money they are paid?
-
Prove that \(A \oplus B \leftrightarrow(A \leftrightarrow B)^{\prime}\) is a tautology. Explain why this makes sense.
-
Sandcastles, Inc.s management has recently been looking at a proposal to purchase a new brick molding machine. With the new machine, the company would not have to buy bricks. The estimated useful...
-
The maximum current allowed by a device's power rating is limited by a \(10-\mathrm{mA}\) fuse. When the device is connected to a \(5-\mathrm{V}\) source, what is the maximum power the device can...
-
The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as: 1. Operating activityadd to...
-
Carol Keene, corporate comptroller for Dumaine Industries, is trying to decide how to present Property, plant, and equipment in the balance sheet. She realizes that the statement of cash flows will...
-
Carol Keene, corporate comptroller for Dumaine Industries, is trying to decide how to present Property, plant, and equipment in the balance sheet. She realizes that the statement of cash flows will...
-
Balance per bank statement Less: outstanding cheques ARKIN Company Bank reconciliation May 31, 2014 6124 6138 6139 6140 add: deposit in transit 2125 932,65 30928,46 960,57 1420 5438,22 25490,24...
-
Company "A" is a manufacturer of wooden and metal structures (20XX) Costs 1. Consumable supplies in the factory warehouse 2. Sandpaper 3. Lubricants 4. Indirect costs: wages 5. Wages of production...
-
Write down at leastfive items (durable goods, not food) that you purchase and their sourcing (where each is from). For example, a shirt may be assembled in China, designed in the US, and made from...
Study smarter with the SolutionInn App