A. Shelley Construction began operations in 2020 and appropriately used the completed-contract method in accounting for its long-term construction contracts. They prepared the following information: Completed-Contract Method Income before income taxes 2020 800,000 $ Percentage-of-Completion Income before income taxes 2021 975,000 Effective January 1, 2021, Shelley changed to the percentage-of-completion method and can justify the change. The company has a tax rate is 25%, and is allowed to use completed-contract method for tax purpose. It determines the amounts under the percentage of completion method to be: 2020 $ 1,100,000 $ 2022 1,121,250 2022 2021 1,298,000 $1,431,100 Required (9 Points): Prepare the journal entries to reflect the change on 1/1/2022. B. On January 1, 2022, Bevins Company decided to change from LIFO to FIFO due to better representation of the flow of inventory and costs. Bevins started the business in 2020. The following analysis was provided by management: Ending Inventory Year 2020 2021 2022 LIFO $375,650 $360,450 $365,975 FIFO $ 405,900 $ 410,750 $445,775 Pretax Income (using LIFO) 975,000 1,350,000 1,389,500 A (using FIFO) 1,005,250 1,370,050 1,419,000 Bevin's tax rate is 25%. The IRS requires the company to pay back the income tax saved from using LIFO for previous years. Required (9 points): Prepare the journal entry necessary to record the change on 1/1/2022.