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Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales are not...

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Accounting

Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales are not reasonably assured, and bad debt losses cannot be reasonably predicted. It is unlikely that repossessed merchandise is in condition to be re-sold. Therefore, Reliable uses the cost recovery method. Merchandise costing $28,750 was sold for $55,750 in 2017. Collections on this sale were $20,400 in 2017, $15,000 in 2018, and $20,350 in 2019. In 2019, Reliable would recognize gross profit of:

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