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gogolik [260]
4 years ago
13

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

rm construction contracts during 2018. 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 2017 $781,000 $606,000 $175,000 2018 701,000 456,000 245,000 (a) Assuming that the tax rate is 30%, what is the amount of net income that would be reported in 2018? Net income $ (b) What entry is necessary to adjust the accounting records for the change in accounting principle? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit
Business
1 answer:
Fynjy0 [20]4 years ago
8 0

Answer:

a) Net Income = $490,700

b) Journal Entry

Debit Construction in process $175,000 Credit Deferred Tax Liability $52,500 Credit Retained earnings $122,500

Explanation:

a) PreTax income $701,000

Tax  ( 701,000*30%) 210,300

Net Income =490,700

Deferred Tax Liability = 175,000*30% =52500

Retained Earnings = 175,000 *70% = 122,500

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Answer: 20,575 pounds

Explanation:

Production needs in February are 20,600 units.

These take a pound of material to be made finished goods so 20,600 pounds are needed.

Raw material purchase = Total required + Closing inventory - Opening inventory

Closing inventory = 25% * March needs

= 25% * 19,300 = 4,825 pounds

Opening inventory = 25% * Feb needs

= 25% * 20,600 = 5,150 pounds

Raw materials purchase = 20,600 + 4,825 - 5,150

= 20,575 pounds

6 0
3 years ago
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Dmitry_Shevchenko [17]

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8 0
4 years ago
Lisa’s pizza is trying to compete with the larger domino’s pizza down the street for customers. She feels she can deliver a bett
jolli1 [7]

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The management of business procedures to achieve the best level of productivity within an organisation is known as operations management (OM). In order to increase an organization's profit, it is concerned with transforming resources like labour and materials into products and services as effectively as feasible.

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Learn more about Operations management here:

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8 0
2 years ago
The financial statement that provides a snapshot view of the financial condition of a business at a point in time is the:
Scilla [17]

Answer:

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It should be noted that balance sheet is

financial statement that provides a snapshot view of the financial condition of a business at a point in time

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3 years ago
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