KC Music Corporation sells pipe organs on a deferred-payment plan. Summary information appears below:
\begin{tabular}{|c|c|c|c|}
\hline & 2014 & 2015 & 2016 \\
\hline \begin{tabular}{l}
Sales \\
Cost of goods sold \\
Gross profit
\end{tabular} & \begin{tabular}{l}
\( \$ 160,000 \) \\
\( (112,000) \) \\
\( \$ 48,000 \) \\
\end{tabular} & \begin{tabular}{l}
\( \$ 220,000 \) \\
\( (165,000) \) \\
\( \$ 55,000 \) \\
\end{tabular} & \begin{tabular}{l}
\( \$ 300,000 \) \\
\( (219,000) \) \\
\( \$ 81,000 \) \\
\end{tabular} \\
\hline \begin{tabular}{l}
Customer collections on: \\
2014 sales \\
2015 sales \\
2016 sales
\end{tabular} & \( \$ 60,000 \) & \begin{tabular}{r}
\( \$ 80,000 \) \\
100,000
\end{tabular} & \begin{tabular}{r}
\( \$ 20,000 \) \\
80,000 \\
140,000
\end{tabular} \\
\hline
\end{tabular}
Required:
1. Calculate the amount of gross profit that would be recognized each year under the installment sales method.
2. Calculate the amount of gross profit that would be recognized each year under the cost recovery method.
