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Indigo IT Consulting changed from the recognition overtime (percentage-of-completion) to the completed-contract method for financial reporting purposes. The company will continue to use the completed-contract
Indigo IT Consulting changed from the recognition overtime (percentage-of-completion) to the completed-contract method for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2017, pretax income under the two methods was as follows: percentage-of-completion $270,000, and completed-contract $215,000. The tax rate is 30%. Prepare Indigo ITs 2017 journal entry to record the change in accounting principle.
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