Ajax Company appropriately accounts for certain sales using the installment sales method. The perpetual inventory system is used. Information related to installment sales for 2016 and 2017 is as follows: 2016 2017 Sales $ 400,000 $ 500,000 Cost of sales 260,000 300,000 Customer collections on: 2016 sales 170,000 150,000 2017 sales - 200,000 Required: 1. Calculate the amount of gross profit that would be recognized each year from installment sales. 2. Prepare all necessary journal entries for the year 2016 and 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Assume that Ajax uses the cost recovery method to account for its installment sales. 3-a. Compute the following: 3-b. Prepare all necessary journal entries for the year 2016 and 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)