Attached. Journal entries for Question 3 &4.............

3. A. Situations ofa Change in Accounting Principle 1. Shelley Construction began operations in 2015 and appropriately used the completed-contract method in accounting for its long-term construction contracts. They prepared the following information: Completed-Contract Method 800,000 $ Income before income taxes $ 975,000 Effective January I , 2017, Shelley changed to the percentage-of-completion method and can justify the change. The company has a tax rate is 35%, and is allowed to use completed-contract method for tax purpose. It determines the amounts under the percentage of completion method to be: Percentage-of-Completion 2017 2016 Income before income taxes S $ Required (7 Points): Prepare the journal entries to reflect the change on 1/1/2017 2. On January 1, 2017, Bevins Company decided to change from LIFO to FIFO due to better representation of the flow of inventory and costs. Bevins started the business in 2015. The following analysis was provided by management: Ending Invent0!2 LIFO FIFO Pretax Income 12/31/2015 $375,650 12/31/2016 $360,450 12/31/2017 $365,975 s 405,900 s 410,750 $ 445,775 (using LIFO) 975,000 1,350,000 Bevin's tax rate is 35%. The IRS requires the company to pay back the income tax saved from using O or previous years. Required (7 points): Prepare the journal entry necessary to record the change on 1/1/ 2017