Carpenter Sells Wholesale to McGuire Inc

Carpenter sells wholesale to McGuire Inc. under an arrangement in which McGuire pays $2,000 plus a 5% royalty of McGuire sales of Carpenter products. Carpenter anticipates that McGuire will sell a total of $2,500 of Carpenter product. Which of the following is true?

A) Carpenter would recognize $2,000 upon delivery and wait until McGuire makes sales to recognize commissions.
B) Carpenter would recognize $2,125, equal to $2,000 + 5% x $2,500 upon delivery.
C) Carpenter would recognize $2,500 upon delivery.
D) None of the other answers is correct.