On January 1, 2010, Wetzel Company sold property for $200,000. The note will be collected as follows: $101,800 in 2010, $61,800 in 2011, and $36,400 in 2012. The property had cost Wetzel $150,000 when it was purchased in 2008.
(a) Compute the amount of gross profit realized each year, assuming Wetzel uses the cost-recovery method.
Year Gross Profit Realized
2010 = ?
2011 = ?
2012 = ?
(b) Compute the amount of gross profit realized each year, assuming Wetzel uses the installment-sales method.
Year Gross Profit Realized
2010 = ?
2011 = ?
2012 = ?