Hampton's Construction, Inc. decided to change from completed-contract method of accounting to percentage-of-completion method. Hampton will continue to use the completed-contract method for income tax purposes. The following information is available for net income. The income tax rate for all years is 35%. Net Income

Year Ended Percentage of Completion Completed Contract December 31,

2014 $145,000 $125,000

December 31, 2015 185,000 154,000

December 31, 2016 201,000 180,000

What is the journal entry to record the change in accounting principle on January 1, 2016?

A. No journal entry needed for prospective application of the change in principle. B.

Account Debit Credit Retained Earnings 46,800 Deferred Tax Asset 25,200

Construction in Progress ......................................72,000 C.

Account Debit Credit Construction in Progress 51,000 Deferred Tax Liability 17,850

Retained Earnings-Prior Period Adj. 33,150 D.

Account Debit Credit Construction in Progress 51,000 Retained Earnings-Prior Period Adj. 51,000