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 $32,750 was sold for $58,250 in 2020. Collections on this sale were $19,100 in 2020, $14,400 in 2021, and $24,750 in 2022. In 2022, Reliable would recognize gross profit of: Multiple Choice $24,750. $0. $10,500. $6,000.