Answer:
a. $478,450
b.Dr Construction in Process $165,500
Cr Deferred tax liability $49,650
Cr Retained earnings $115,850
Explanation:
A. Calculation for the amount of net income that would be reported in 2015 for Pam Erickson Construction Company
Using this formula
Net income =(Income before income tax ) Income before income tax-Tax rate
Let plug in the formula
Net income= $683,500 - (683,500 × 30%)
Net income= $683,500 - $205,050
Net income= $478,450
B. Preparation of the Journal entry(ies) that are necessary to adjust the accounting records
For Pam Erickson Construction Company
Dr Construction in Process $165,500
Cr Deferred tax liability $49,650
($165,500 × 30%)
Cr Retained earnings $115,850
($165,500 × (100%-30%)
