Q5 (15 marks)

In January, 2020, Perty Inc. sells an inventory item for

$1,000,000

The cost of the item is:

$304,000

There is a down payment in 2020 of:

40%

3 annual payments are made in the years 2021, 2022, and 2023 of:

20%

Indicate the amount of the reserve that can be deducted, if any, and the net income, for each of the years 2020 through 2023