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Question(s) / Instruction(s):

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:

a.            debit to Construction in Process.

b.            debit to Loss on Long-term Contracts in the amount of the difference on prior years, net of tax.

c.             debit to Retained Earnings in the amount of the difference on prior years, net of tax.

d.            credit to Deferred Tax Liability.

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