Dolzer Inc. sold a business asset with a $474,000 adjusted book and tax basis for $775,000. The purchaser paid $100,000 in cash and gave Dolzer a note for the $675,000 balance of the price. Dolzer will not receive a payment on the note until next year. If Dolzer uses the installment sale method, compute Dolzer's GAAP and tax gain in the year of sale. Hint GAAP does not recognize the installment sale method of accounting.

A. Book gain $301,000; tax gain $100,000. B. Book and tax gain $35,839. C. Book gain $301,000; tax gain $25,935. D. None of these.