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1) A company changes from percentage-of-completion to completed-
contract, which is the method used for tax purposes. The entry to record
this change should include a
2) Which of the following is accounted for as a change in accounting
principle?
3) A company changes from straight-line to an accelerated method of
calculating depreciation, which will be similar to the method used for
tax purposes. The entry to record this change should include a
4) Presenting consolidated financial statements this year when
statements of individual companies were presented last year is
5) During 2008, a construction company changed from the completed-
contract method to the percentage-of-completion method for accounting
purposes but not for tax purposes. The following lists include gross
profit figures under both methods for the past 3 years:
6) On January 1, 2005, Baden Co. purchased a machine, which was its
only depreciable asset, for $300,000. The machine has a 5-year life, and
no salvage value. Sum-of-the-years'-digits depreciation has been used
for financial statement reporting and the elective straight-line method for
income tax reporting. Effective January 1, 2008, for financial statement
reporting, Baden decided to change to the straight-line method for
depreciation of the machine. Assume that Baden can justify the change.
7) The deferred tax expense is the