Problem $3$A: Situations of a Change in Accounting Principle

Shore Construction began operations in $2023$ and appropriately used the completed$-$contract method in accounting for its longterm construction contracts. They prepared the following information:

Completed$-$Contract Method $20232024,2025$

Income before income taxes $$800,000,$$$975,000,1,121,250$

Effective January $1,2025,$ Shore 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:

Percentage$-of-$Completion $2023,2024,2025$

Income before income taxes $$1,100,000,$$$1,298,000,$$$1,431,100$

Required: Prepare the journal entries to reflect the change on $\frac{1}{1}\frac{?}{2025}.$