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

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Accounting

Reliable Enerprises 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 $ 32,000 was sold for $56,250 in 2017. Collections on this sale were $21,800 in 2017, $14,800 in 2018, and $19,650 in 2019. In 2017 Reliable would recognize gross profit of.

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