Intermediate Accounting: E22-1 Cherokee Construction Company changed from the

Intermediate Accounting 
E22-1 Change in Principle-Long-term Contracts 
Cherokee Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2010. 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 
2009 780,000 610,000 170,000 
2010 700,000 480,000 220,000 

Instructions 
(a) Assuming that the tax rate is 35%, what is the amount of net income that would be reported in 2010?  
(b) What entry is necessary to adjust the accounting records for the change in accounting principle? (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
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