Final answer:
Carl Corporation should choose between the installment method and immediate recognition based on when the sale proceeds are received.
Step-by-step explanation:
When determining how a company should report the sale of an asset such as land, particularly when a company has a large number of shareholders, the decision depends on the revenue recognition principle and specifics of the transaction. The installment method is utilized when the payment for the sale of the land will be received over multiple periods. This method defers the recognition of revenue and matches income with the cash flows from the payments as they are received.
However, if the sales proceeds are received all at once, the company would report the sale in the year it occurred, which would be 2017 in this case.
To decide the most appropriate method, Carl Corporation must consider how and when it obtains money from the sale. If the payments are received over time, such that it would impact the timing of income recognition, then the installment method might be more suitable. In contrast, if the proceeds are received immediately, reporting the sale in 2017 would be the correct approach.