5 At the beginning of 2020, Pronghorn Construction Company changed from the completed-contract method to recognizing revenueover time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contractmethod for tax purposes. For years prior to 2020, pretax income under the two methods was as follows: percentage-of-completion$123,000, and completed-contract $78,720. The tax rate is 20%.Prepare Pronghorn's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indentedwhen amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)Account Titles and ExplanationDebitCreditConstruction In ProcessDeferred Tax LlabilityRetained Earnings

Pre Tax income Under % Completion Method. = $123,000 Pre Tax income Under Completion Contract…

Prepare Pronghorn's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Prepare Pronghorn's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 4MC: Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the...

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