1. During 2020, Waldo Inc. sold 10 acres of prime commercial zoned land to a builder for $5,000,000. The builder gave Waldo a $1,000,000 down payment and will pay the remaining balance of $4,000,000 to Waldo in 202 Waldo purchased the land in 2011 for $2,000,000. Using the installment method, how much profit will Waldo report for 2020?

1. $600,000
2. $1,000,000
3. $3,000,000

2. Using the same information as in the preceding question, how much profit will Waldo report for 2020 using the cost recovery method?

1. None
2. $600,000
3. $1000,000