1. ASC 250 specifies that the effects of a change in accounting principle should be recorded on a prospective basis when the change is from the

a. Presentation of statements of individual companies to their inclusion in consolidated statements.

b. Straight-line method of depreciation for previously recorded assets to the double-declining balance method.

c. Cash basis of accounting for vacation pay to the accrual basis.

d. Completed-contract method of accounting for long-term construction-type contracts to the percentage-of-completion method.

2. On December 31, 20X2, Dirk Corp. sold Smith Co. two airplanes and simultaneously leased them back. Additional information pertaining to the sale-leasebacks follows:

	Plane #1	Plane #2
Sales price	$600,000	$1,000,000
Carrying amount, 12/31/X2	$100,000	$550,000
Remaining useful life, 12/31/X2	10 years	35 years
Lease term	8 years	3 years
Annual lease payments	$100,000	$30,000

In its December 31, 20X2, balance sheet, what amount should Dirk report as deferred gain on these transactions?

a. $0

b. $450,000

c. $500,000

d. $950,000