Blossom Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2021. In 2021, it changed to the percentage-of-completion method.The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below.


2019 2020 2021


Completed contract $300,000 $200,000 $100,000


Percentage-of-completion 500,000 250,000 180,000