Diamond Company changed from the completed-contract method of accounting for long-term contracts to the percentage-of-completion method,during 2014.Reported earnings in 2013 were $50,000,and the beginning 2013 retained earnings balance was $150,000.Net income for 2014 under the competed-contract method would have been $140,000.No dividends were declared during 2013 and 2014.

Required:
Prepare the 2013 and 2014 comparative retained earnings statements.

Question

Diamond Company changed from the completed-contract method of accounting for long-term contracts to the percentage-of-completion method,during 2014.Reported earnings in 2013 were $50,000,and the beginning 2013 retained earnings balance was $150,000.Net income for 2014 under the competed-contract method would have been $140,000.No dividends were declared during 2013 and 2014.
  
Required:
Prepare the 2013 and 2014 comparative retained earnings statements.

Quizplus · Accepted Answer

The Answer of Diamond Company changed from the completed-contract method of accounting for long-term contracts to the percentage-of-completion method,during 2014.Reported earnings in 2013 were $50,000,and the beginning 2013 retained earnings balance was $150,000.Net income for 2014 under the competed-contract method would have been $140,000.No dividends were declared during 2013 and 2014.
  
Required:
Prepare the 2013 and 2014 comparative retained earnings statements.

Diamond Company Changed from the Completed-Contract Method of Accounting for Long-Term