During 2020, Waldo Inc. sold 10 acres of prime commercial zoned land to a builder for...

During 2020, Waldo Inc. sold 10 acres of prime commercial zoned land to a builder for $5,000,000. The builder gave Waldo a $1,000,000 down payment and will pay the remaining balance of $4,000,000 to Waldo in 202 Waldo purchased the land in 2011 for $2,000,000. Using the installment method, how much profit will Waldo report for 2020?

$600,000
$1,000,000
$3,000,000

Using the same information as in the preceding question, how much profit will Waldo report for 2020 using the cost recovery method?

None
$600,000
$1000,000

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