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Question Two : (10 marks) A Construction Company began its operation in 01/1/2015 using percentage of completion in recognize revenues. In 31/12/2018 the company changes
Question Two : (10 marks) A Construction Company began its operation in 01/1/2015 using percentage of completion in recognize revenues. In 31/12/2018 the company changes its method to full cost method; the following reported income before tax for the previous years Year income at percentage income Full dividend paid 2015 370,000 395,000 160,000 2016 390,000 420,000 250,000 2017 410,000 380,000 300,000 2018 280,000 320,000 200,000 The differences in income just related for change in revenue method, income for 2019 under full method before tax was $150,000 with $59,375cash dividend and $70,000 share dividend, more over the company discovered an increase in ending inventory for 2018 for $ 25,000. Required: if the 25% income tax didn't change during the years prepare the retained earnings statement for the year 2019 with any entry required
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