Reference no: EM132553721

During 2018, a construction company that began operations in 2016 changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes.

• Income tax rate of 30% for all years,

Gross profit figures under both methods for the past three years appear below:

                           Completed-Contract           Percentage-of-Completion

2016?                    $ 475,000                            $ 900,000

2017                      625,000?                               950,000

2018?                     700,000                                 1,050,000

                             $1,800,000                          $2,900,000

Problem 1: Construction in Progress has a debit balance of $

Problem 2: Deferred Tax Liability has a credit balance of $

Problem 3: Retained Earnings has a credit balance of $