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Freda's business sold a furnace to a customer in December 2018 for $20,000. The furnace cost the business $10,000. The customer will pay the purchase

Freda's business sold a furnace to a customer in December 2018 for $20,000. The furnace cost the business $10,000. The customer will pay the purchase price in 4 equal annual instalments of $5,000 in December 2019, December 2020, December 2021 and December 2022. What is the maximum reserve Freda's business can claim for tax purposes for its December 31, 2020 year end?

$10,000.

$7,500.

$5,000.

$0

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