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Business, 06.05.2020 17:04 vkyles84

At the beginning of 2020, Wertz Construction Company changed from the completed-contract method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows: percentage-of-completion $120,000, and completed-contract $80,000. The tax rate is 20%. Wertz has a profit-sharing plan, which pays all employees a bonus at year-end based on 1% of pretax income.

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