Rogers Manufacturing Sells an Old Machine to KSS Corp

Multiple Choice

Rogers Manufacturing sells an old machine to KSS Corp.which is having financial difficulty.Rogers agrees to accept payment over 3 years.The adjusted basis of the machine to the seller is $5,000 and the buyer is expected to make payments of $2,000 per year for 3 years.What amount of net profit is recognized by the seller in year 3 if the seller uses the installment method? (Assume that the buyer makes the payments.)

A) $2,000
B) $1,000
C) $333.33
D) $0
E) $666.67