Question: Refer to the situation described in BE 5-35. How much gross profit will Apache recognize in both 2018 and 2019 applying the cost recovery method?

Refer to the situation described in BE 5-35. How much gross profit will Apache recognize in both 2018 and 2019 applying the cost recovery method?

In BE 5-35

On July 1, 2018, Apache Company sold a parcel of undeveloped land to a construction company for $3,000,000. The book value of the land on Apache's books was $1,200,000. Terms of the sale required a down payment of $150,000 and 19 annual payments of $150,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2019. Apache has no significant obligations to perform services after the sale.

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