On January 2, 2010, Blake Co. sold a used machine to Cooper, Inc. for $900,000, resulting in a gain of $270,000.

On that date, Cooper paid $150,000 cash and signed a

$750,000 note bearing interest at 10%. The note was payable in three annual installments of $250,000 beginning January 2, 2011. Blake appropriately accounted for the sale under the installment method. Cooper made a timely payment of the first installment on January 2, 2011, of

$325,000, which included accrued interest of $75,000. What amount of deferred gross profit should Blake report at December 31, 2011?

a. $150,000

b. $172,500

c. $180,000

d. $225,000