Shelley Construction Began Operations in 2010 and Appropriately Used the Completed-Contract

Multiple Choice

Shelley Construction began operations in 2010 and appropriately used the completed-contract method in accounting for its long-term construction contracts.Effective January 1, 2012, Shelley changed to the percentage-of-completion method for both financial and tax reporting and can justify the change.Although cumulative pretax income up to January 1, 2012, was $800, 000 using the completed-contract method, cumulative pretax income would have totaled $1, 100, 000 had the percentage-of-completion method been used.Assuming an income tax rate of 30%, Shelley's 2012 financial statements should report a marginal change in its January 1, 2012 balance in Retained Earnings to restate it for the effect of the accounting change in the amount of

A) $ 0
B) $ 90, 000
C) $210, 000
D) $300, 000