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Blossom Inc., a real estate developing company, was accounting for its long-term contracts using...

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Accounting

Blossom 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
$385000
$261000 $137000
Percentage-of-completion
685000 323000
205000
4.What amount will be debited to Construction in Process account, to record the change at beginning of 2021?
$238000
$62000
$137000
$362000

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