Answered

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For a construction contract where the company uses the percentage of completion method and there is a change in the estimated total cost of the contract from $12 million to $13 million, the accountant should do the following:
A. Compute the percentage completed using the new cost total if the company uses the cost ratio to estimate percentage completed.
B. Use estimated costs determined at the beginning of the contract, not actual costs to date.
C. Use retrospective treatment.
D. Change the Opening Retained Earnings.

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