On January 1, 2009, Bubba Construction Decided to Change from the Completed

question 82

Essay

On January 1, 2009, Bubba Construction decided to change from the completed contract method of accounting for long-term construction contracts to the percentage-of-completion method. The company will continue to use the completed contract method for tax purposes. The tax rate is 30%. The following are all relevant data concerning the change.
Required:
Prepare the journal entry to record the accounting change.
$$\begin{array}{l}\begin{array} { l c c } &\text { Income Before Income Tax }\\\text { Year } & \text { \% of Completion } & \text { Completed Contract } \\\hline \text { Before 2008 } & \$ 500,000 & \$ 300,000 \\2008 & 400,000 & 250,000 \\2009 & 450,000 & 400,000\end{array}\end{array}$$

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Definitions:

Suburbs

Residential areas located on the outskirts of a city or large town, often characterized by a lower population density than urban centers.

Environmental Racism

The practice of disproportionately exposing communities of color to pollution and environmental hazards, often due to discriminatory policies.

Racial/Ethnic Group

A category of people who identify with each other based on common ancestral, social, cultural, or national experiences, with recognition that race is a socially constructed concept.

Native Americans

Indigenous peoples of the United States, including various tribes, communities, and ethnic groups that were present in the territory before European colonization.