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Wertz Corporation decided at the beginning of 2012 to change from the completed-contract method to the percentage-of-completion method for financial reporting purposes. The company will continue t
Wertz Corporation decided at the beginning of 2012 to change from the completed-contract method to the percentage-of-completion
method for financial reporting purposes. The company will continue to use completed-contract method for tax purposes. For years prior
to 2012, pre-tax income under the two methods was as follows: percentage-of-completion $120,000, and completed-contract $80,000. The
tax rate is 35%. Prepare Wertz's 2012 journal entry to record the change in accounting principle
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***** *********** decided ** *** ********* of 2012 ** ****** from *** completed-contract ****** ** *** ************************ method for ********* ********* ******** *** ******* will ******** ** *** completed-contract ****** *** tax purposes *** ***** ***** ** **** pre-tax ****** under *** *** methods *** ** ******** percentage-of-completion $120000 *** completed-contract ****** *** *** rate ** *** Prepare ******* 2012 ******* ***** ** record *** ****** ** ********** ****************************** in ******* ******** *** $80000) 40000 ******** Tax ********* ********* *** $80000) X **** ***** ******** ******** *****
