Hampton's Construction,Inc.decided to change from completed-contract method of accounting to percentage-of-completion method.Hampton will continue to us the completed-contract method for income tax purposes.The following information is available for net income.The income tax rate for all years is 35%. What is the journal entry to record the change in accounting principle on January 1,2016?
A)No journal entry need for prospective application of the change in principle.
C) Construction in Progress 72,000
D) Retained Earnings-Prior Period Adj. 33,150

Question

Hampton's Construction,Inc.decided to change from completed-contract method of accounting to percentage-of-completion method.Hampton will continue to us the completed-contract method for income tax purposes.The following information is available for net income.The income tax rate for all years is 35%.   What is the journal entry to record the change in accounting principle on January 1,2016?
A)No journal entry need for prospective application of the change in principle. 
C) Construction in Progress 72,000 
D) Retained Earnings-Prior Period Adj. 33,150

Quizplus · Accepted Answer

The Answer of Hampton's Construction,Inc.decided to change from completed-contract method of accounting to percentage-of-completion method.Hampton will continue to us the completed-contract method for income tax purposes.The following information is available for net income.The income tax rate for all years is 35%.   What is the journal entry to record the change in accounting principle on January 1,2016?
A)No journal entry need for prospective application of the change in principle. 
C) Construction in Progress 72,000 
D) Retained Earnings-Prior Period Adj. 33,150