Sheridan Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2018. In 2018, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below. 2016 2017 2018 Completed contract $415000 $279000 $143000 Percentage-of-completion 715000 347000 235000 Which of the following will be included in the journal entry made by Sheridan to record the income effect? Question 14 options: a) A credit to Retained Earnings for $208,200. b) A debit to Retained Earnings for $140,200. c) A credit to Retained Earnings for $140,200. d) A debit to Retained Earnings for $229,200
Sheridan Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2018. In 2018, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below. 2016 2017 2018 Completed contract $415000 $279000 $143000 Percentage-of-completion 715000 347000 235000 Which of the following will be included in the journal entry made by Sheridan to record the income effect? Question 14 options: a) A credit to Retained Earnings for $208,200. b) A debit to Retained Earnings for $140,200. c) A credit to Retained Earnings for $140,200. d) A debit to Retained Earnings for $229,200
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 6P
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Sheridan Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2018. In 2018, it changed to the percentage-of-completion method.
The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below.
2016 | 2017 | 2018 | ||||
Completed contract | $415000 | $279000 | $143000 | |||
Percentage-of-completion | 715000 | 347000 | 235000 |
Which of the following will be included in the
Question 14 options:
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