Arlen Technology Solutions, Inc. adopted the percentage-of-completion method when it began operations on January 1, 2016. The company elected to change to the completed-contact method on January 1, 2018, due to a change in the size of its computer network contracts. Net income under both methods for the first 3 years of the company's operations is presented in the following table. Ignore income tax effects.

Required

a. Prepare the journal entry required to record the accounting change on January 1, 2018.

b. Prepare the footnote to disclose the change from the percentage-of completion to the completed contact method. Designate the note as ''Note A: Change in Method of Accounting for Computer Network Contracts."

Net Income Percentage of Completion Completed Contract Year Ended December 31, 2016 December 31. 2017 December 31. 2018 $168 000 112,000 $147000 98 000 210.000 231,000