Larkspur Construction Company changed from the cost$-$recovery to the percentage$-$of$-$completion method of accounting for long$-$term construction contracts during $2026.$ For tax purposes, the company employs the cost$-$recovery method and will continue this approach in the future. $($Hint: Adjust all tax consequences through the Deferred Tax Liability account.$)$ The appropriate information related to this change is as follows.

Pretax Income from

Percentage$-$of$-$Completion Cost$-$Recovery Difference

$2025$ $$735,000$ $$564,000$ $$171,000$

$2026651,000440,000211,000$

Assuming that the tax rate is $40\%,$ what is the amount of net income that would be reported in $2026?$

What is the Net income?