Answer:
Option (c) is correct.
Explanation:
Gross profit on sale :
= (Land value - Basis) ÷ Land value
= (300,000 - 250,000) ÷ 300,000
= 0.1667
= 16.67%
Therefore,
Gain recognized in :
Year 1 :
= Cash received × Gross profit percent
= 150,000 × 16.67%
= 25,000
Year 2 :
= Note value× Gross profit percent
= 150,000 × 16.67%
= 25,000