Journal entry to record the change in accounting principle


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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Accounting Basics: Journal entry to record the change in accounting principle
Reference No:- TGS046508

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