Charter Corporation, which began business in 2018, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales made during 2018 and 2019:

Required:
1. How much gross profit should Charter recognize in 2018 and 2019 from installment sales?
2. What should be the balance in the deferred gross profit account at the end of 2018 and 2019?

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Installment sales Cost of installment sales Cash collections on installment sales during: 2018 $360,000 234,000 2019 $350,000 245,000 2018 2019 150,000 100,000 120,000