Cowden Properties Sold a Condominium to Ms

Multiple Choice

Cowden Properties sold a condominium to Ms.Roberts for $90,000.Cowden originally acquired the condo at a cost of $40,000 and made improvements to the unit totaling $20,000.The contract for sale required Ms.Roberts to pay the $90,000 as follows:
Year 1 - $ 5,000
Year 2 - $10,000
Year 3 - $30,000
Year 4 - $45,000
Refer to the Cowden Properties example.Under the installment method, how much net profit would Cowden recognize in year 1?

A) $1,667
B) $2,667
C) $3,333
D) $3,667
E) $5,000