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What amount will debited to construction in process account

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Question - Sandhill Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2021. In 2021, it changed to the percentage-of-completion method.

The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below.

 

2019

2020

2021

Completed contract

$490000

$324000

$158000

Percentage-of-completion

790000

407000

310000

Required - What amount will be debited to Construction in Process account, to record the change at beginning of 2021?

Reference no: EM133075932

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