Question
Sunland Home Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2024. In 2024, it
Sunland Home Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2024. In 2024, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 20%. Income before taxes under both the methods for the past three years appears below.
| 2022 | 2023 | 2024 | |
| Completed contract | $480000 | $318000 | $156000 |
| Percentage-of-completion | $780000 | $399000 | $300000 |
What amount will be debited to Construction-in-Progress to record the change at the beginning of 2024?
A. $381000
B. $81000
C. $208000
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Accounting
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
23rd Edition
978-0324662962
