undefined Blossom Inc, a real estate developing company, was accounting for its long-term contracts...
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Blossom Inc, a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2021. In 2021, 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. 2019 2020 2021 Completed contract $385000 $261000 $137000 Percentage-of-completion 685000 323000 205000 Which of the following will be included in the journal entry made by Blossom to record the income effect? O A credit to Retained Earnings for $217200 O A debit to Retained Earnings for $193800 O A credit to Retained Earnings for $131800 O A debit to Retained Earnings for $131800
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