Suppose a Montgomery Ward store sells $10,000 worth of kitchen appliances on the installment plan and collects a down payment of $1,500. Ward’s cost of the appliances is

$7,000. How much gross profit will the company report this period under the installment revenue method? (pp. 496-497)

a. $450

c. $3,000

b. $1,500

d. $10,000