Blue 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
2014 $752,200 $586,700 $165,500
2015 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 2015?
(b) What entry(ies) are necessary to adjust the accounting records for the change in accounting principle?

a. Particulars                          Amount

Pre-tax income for 2015       $683,500

Less: Income tax expenses  $205,050 ($683,500*30%)

Net Income for 2015            $478,450

b. Deferred tax liability = Temporary difference * Tax rate

= $165,500*30%

= $49,650

Income tax expense = Construction in process - Deferred tax liability

= $165,500 - $49,650

= $115,850

Date   Account titles and Explanation            Debit        Credit

2015   Construction in progress                     $165,500

                  Deferred tax liability                                        $49,650

                  Retained earnings                                           $115,850

           (To record deferred tax liability and retained earnings for 2015)

the best way to learn how to declare a major is to talk to a admissions office.

answer/// product differentiation;