Sandhill Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2021. In 2021, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below.

		2019		2020		2021
Completed contract		$430000		$288000		$146000
Percentage-of-completion		730000		359000		250000

Which of the following will be included in the journal entry made by Sandhill to record the income effect?

a	A debit to Retained Earnings for $215400

b	A credit to Retained Earnings for $144400

c	A credit to Retained Earnings for $215400

d	A debit to Retained Earnings for $144400