Charter Corporation which began business in 2013, appropriately uses the installment sales method of accounting for its installment sales. The following data were obtained for sales during 2013 and 2014:

2013 2014

Installment sales 420,000 410,000

Cost of installment sales 210,000 287,000

Cash collections on installment sales during:

2013 150,000 100,000

2014 ---- 120,000

1.

How much gross profit should Charter recognize in 2013 and 2014 from installment sales?

2.

What should be the balance in the deferred gross profit account at the end of 2013 and 2014?