Suppose Century Realty sold land for ($ 200,000) on an installment basis, receiving a down payment of

Question:

Suppose Century Realty sold land for $\$ 200,000$ on an installment basis, receiving a down payment of $\$ 50,000$ to be followed by 12 installments of $\$ 12,500$ each. If Century's cost of the land was $\$ 120,000$, how much gross profit would Century record under the installment method

(a) when the down payment is received and

(b) when each installment is received?

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