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kirill115 [55]
3 years ago
9

Kingbird Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-

term construction contracts during 2021. For tax purposes, the company employs the completed-contract method and will continue this approach in the future. (Hint: Adjust all tax consequences through the Deferred Tax Liability account.) The appropriate information related to this change is as follows.
Pretax Income from:

Percentage-of-Completion Completed-Contract Difference

2020 $752,200 $586,700 $165,500
2021 683,500 444,700 238,800

(a) Assuming that the tax rate is 30%, what is the amount of net income that would be reported in 2021?


(b) What entry(ies) are necessary to adjust the accounting records for the change in accounting principle?
Business
1 answer:
sergey [27]3 years ago
3 0

Answer:

a) 2021 year income: 526,540

b) journal entries

income tax expense    225.660‬ debit

    income tax deferred liability (*1)  49.650‬ debit

    income tax payable    176.010‬ credit

Explanation:

Year   Accounting Tax purpose Difference

2020 752200 586700 165500

2021 683500 444700 238800

2021

752,200 x 30% = 225,660

after tax income: 526.540‬

2022

683,500 x 30% = 205,050

after tax income:   478.450‬

We recognize the income tax expense n the accounting method of revenue/expense recognizition

while, the payable will use the goverment purposes.

Then, the differnce wi considered either income tax deferred.

*1 it is a liability as the company is paying lower taxes to day to pay more than before.

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PilotLPTM [1.2K]

Answer:

9.87%

Explanation:

Calculation to determine What APR do you have to earn in order to achieve your goal

$2.7 million = $600{[(1 + r)444 − 1] / r}

r = .0082*100

r=.82%

r = .82% × 12

r = 9.87%

Therefore the APR you have to earn in order to achieve your goal is 9.87%

6 0
3 years ago
The goal of utility maximization is to allocate your ______ in order to maximize your ______.
inn [45]
<span>The goal of utility maximization is to allocate your resources in order to maximize your satisfaction.
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5 0
3 years ago
Seth is mentally incompetent but has not been adjudged by a court to be incompetent. Seth enters into a contract with Toby for t
Kaylis [27]

Answer:

Void

Explanation:

Void is the term of law, which is defined as the contract is not valid currently, and the parties of the contract are not held to its terms. The void contract is the one which is generally unenforceable.

The contract could be void because of many reasons like the contract need one party to perform that act which is impossible or in that case, where one party is not mentally incompetent.

So, in this case, the contract is most likely to be void as the contract with the party who is mentally incompetent, though the party has not been adjudged through court.

6 0
3 years ago
Bob operates Bob's Pizza, a small pizzeria that sells about 50 pizzas a day. Bob's daily total fixed costs are $100, and his dai
Sonja [21]

Available options are:

A. All of the choices are correct.

B. Average fixed costs would increase.

C. Marginal costs would increase.

D. Average variable costs would increase

Answer:

Option B. Average fixed costs would increase.

Explanation:

As the variable cost is the same which means that the marginal cost (All variable costs) would neither increase nor the average variable cost (Average variable cost due to fluctuating variable cost) would increase. Hence both Option C and D are incorrect.

Option B is correct because:

Average Fixed cost = (Initial Value + Value Now) / 2

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6 0
3 years ago
g Consider the following two separate events for a company during the year: 1. Gain on sale of investments = $10. 2. Unrealized
Nina [5.8K]

Answer:

B.) Net income = $10; Comprehensive income = $30.

Explanation:

The computation and effect of these two events increase net income and comprehensive income is shown below:

Since there is a gain on sale of investment so it increased the net income

So the net income would be increased by $10

And, there is an Unrealized gain on investment from an increase in fair value of $20

So, the comprehensive income increased by

= $10 + $20

= $30

Hence, the correct option is B

7 0
3 years ago
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