Pina Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2021. For tax purposes, the company employs the completed-contract 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		Completed-Contract		Difference
2020		$858,000		$585,000		$273,000
2021		785,000		470,000		315,000

(a) Assuming that the tax rate is 30%, what is the amount of net income that would be reported in 2021?

b) What entry is necessary to adjust the accounting records for the change in accounting principle? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)