On July 1, 2013, Apache Company sold a parcel of undeveloped land to a construction company for $5,000,000. The book value of the land on Apache's books was $2,000,000. Terms of the sale required a down payment of $200,000 and 24 annual payments of $200,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2014. Apache has no significant obligations to perform services after the sale.
What should be the balance in the deferred gross profit account at the end of 2014 applying the installment sales method?
Deferred gross profit at the end of 2014: