Multiple Choice
Use the following information for questions 44 and 45.
Dream Home Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2015. In 2015, it changed to the percentage-of-completion method.
The company decided to use the same for income tax purposes. The tax rate enacted is 40%.
Income before taxes under both the methods for the past three years appears below. 
-Which of the following will be included in the journal entry made by Dream Home to record the income effect?
A) A debit to Retained Earnings for $150,000
B) A credit to Retained Earnings for $150,000
C) A credit to Retained Earnings for $100,000
D) A debit to Retained Earnings for $100,000
Correct Answer:
Verified
Correct Answer:
Verified
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