Problem
Sunland Home Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2024. In 2024, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 20%. Income before taxes under both the methods for the past three years appears below.
|
|
2022
|
2023
|
2024
|
|
Completed contract
|
$480000
|
$318000
|
$156000
|
|
Percentage-of-completion
|
$780000
|
$399000
|
$300000
|
What amount will be debited to Construction-in-Progress to record the change at the beginning of 2024?