$15,000 $20,550 $0 $8,000

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 $56,250 in 2020. Collections on this sale were $20,700 in 2020, $15,000 in 2021, and $20,550 in 2022 In its 2021 year-end balance sheet, Reliable would report installment receivables (net) of Multiple Choice $15,000 $20.550 SO