Kenny Harrison Corp., a capital goods manufacturing business that started on January 4, 2008, and operates on a calendar-year basis, uses the installment-sales method of profit recognition in accounting for all its sales. The following data were taken from the 2008 and 2009 records.

The amounts given for cash collections exclude amounts collected for interest charges.

Instructions
(a) Compute the amount of realized gross profit to be recognized on the 2009 income statement, using the installment-sales method.
(b) Compute the amount of realized gross profit to be recognized on the income statement, using the cost-recoverymethod.

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Installment sales Gross profit as a percent of costs Cash collections on sales of 2008 Cash collections on sales of 2009 2008 $480,000 25% $140,000 2009 $620,000 28% S240,000 $180,000