1. On July 31, Mega Store sold a flat screen television to a customer for $1,375. The television had a cost basis of $650. The customer is required to make a $375 down payment and to pay the $1,000 balance in equal $25 payments over the next 40 months on the last day of each month. Under the installment method of revenue recognition, how much gross profit will the company recognize during the year?

   		$264
   		$210
   		$293
   		$375 Cost of goods sold = $500 / $1,375 $650 = $236 Gross profit = $500 $236 = $264