Hedgeway Company uses the cost recovery method. Hedgeway began operations on January 1, 2004 and at the end of the year the following accounting data was available

The amount of gross profit related to the cost recovery sales Hedgeway should recognize in 2004 is_________.

Total credit sales Sales under cost recovery method Cost of goods sold on cost recovery method Cash receipts on cost recovery sales $400,000 100,000 60,000 35,000