On January 1, 2025, Blossom Corporation changed to the percentage-of-completion method of income recognition. This change is justified by Blossom Corporation. On December 31, 2024, Blossom's Retained Earnings balance was $1620000. Blossom calculated that, if the percentage-of-completion method had been used, the accumulated impact on net income (before taking into consideration any income tax effects) would have been an additional $320000. If Blossom's income tax rate is 25%, one of the impacts of this accounting change would be O a decrease to the Retained Earnings balance on December 31, 2024, of $320000. O an increase to the Retained Earnings balance on December 31, 2024, of $320000. O an increase to Construction in Progress of $320000 on December 31, 2024. O an increase to Construction in Progress of $1620000 on December 31, 2024.

On January 1, 2025, Blossom Corporation changed to the percentage-of-completion method of income recognition. This change is justified by Blossom Corporation. On December 31, 2024, Blossom's Retained Earnings balance was $1620000. Blossom calculated that, if the percentage-of-completion method had been used, the accumulated impact on net income (before taking into consideration any income tax effects) would have been an additional $320000. If Blossom's income tax rate is 25%, one of the impacts of this accounting change would be O a decrease to the Retained Earnings balance on December 31, 2024, of $320000. O an increase to the Retained Earnings balance on December 31, 2024, of $320000. O an increase to Construction in Progress of $320000 on December 31, 2024. O an increase to Construction in Progress of $1620000 on December 31, 2024.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 13P

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