On April 1, 2022, the Olympic Company sold a large piece of machinery to the Peachland Construction Company for $80,000. The cost of the machine was $40,000. Peachland made a down payment of $10,000 and agreed to pay the remaining balance in seven equal monthly installments of $10,000, plus interest at 12% on the unpaid balance, beginning May 1.

Required: You are an accounting analyst at Olympic Company. In a professional email to your supervisor, answer the following:

1. Identify three alternative methods for recognizing revenue and costs for the situation described and compute the amount of gross profit that would be recognized in 2022 using each method.
2. Discuss the circumstances under which each of the three methods would be used.