Subject: accounting Pam Erickson Construction Company changed from the cost-recovery to the percentage-of-completion method of accounting forlong-term construction contracts during 2026. For tax purposes, the company employs the cost-recovery method and will continuethis approach in the future. (Hint: Adjust all tax consequences through the Deferred Tax Liability account.) The appropriateinformation related to this change is as follows.20252026(a)(b)Percentage-of-CompletionPretax Income fromNet income $$780,000Your answer is correct.e Textbook and MedialList of Accounts700,000Assuming that the tax rate is 20%, what is the amount of net income that would be reported in 2026?Cost-RecoveryDifference$590,000 $190,000560000Account Titles and Explanation480,000220,000What entry is necessary to adjust the accounting records for the change in accounting principle? (Credit account titles areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titlesand enter O for the amounts. List all debit entries before credit entries.)DebitAttempts: 1 of 3 usedCredit

Net income is an important tool or way because it indicates how much money a company has generated…

Pam Erickson Construction Company changed from the cost-recovery to the percentage-of-completion method of accounting for long-term construction contracts during 2026. For tax purposes, the company employs the cost-recovery 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. 2025 2026 (a) Percentage-of-Completion (b) Net income $ Pretax Income from Your answer is correct. eTextbook and Media $780,000 List of Accounts 700,000 Assuming that the tax rate is 20%, what is the amount of net income that would be reported in 2026? Cost-Recovery 560000 Difference $590,000 $190,000 480,000 220,000 Account Titles and Explanation What entry is necessary to adjust the accounting records for the change in accounting principle? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before credit entries.) Debit 100 Attempts: 1 of 3 used Credit