Sheridan Construction Company, which began operations in 2020, 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. The appropriate information related to this change is as follows. Pretax Income from Percentage-of-Completion Completed-Contract Difference

2020 866,000 $583,000 $283,000

2021 911,000 483,000 428,000

(a) Assuming that the tax rate is 20%, what is the amount of net income that would be reported in 2021? Net income ?

(b) What entry is necessary to adjust the accounting records for the change in accounting principle?