On November 15, 2016, LaGrow Developers Sold a Parcel of Land

Multiple Choice

On November 15, 2016, LaGrow Developers sold a parcel of land for $6,000,000. They had originally paid $3,000,000 for the land. The terms of the sale called for a $1,000,000 down payment, and the balance in two equal installments payable on November 15, 2017 and November 15, 2018. Disregard interest charges. LaGrow has a December 31 year-end. Refer to LaGrow Developers. Assuming that LaGrow uses the installment sales method, the company would recognize gross profit in 2016 of ________. (Do not round intermediary calculations, and round your final answer to the nearest whole dollar.)

A) $0
B) $500,000
C) $3,000,000
D) $1,000,000