Yarbow Corporation has a normal gross profit on installment sales of 30%. A 2006 sale resulted in a default early in 2008. At the date of default, the balance of the installment receivable was $24,000, and the repossessed merchandise had a fair value of $13,500. Assuming the repossessed merchandise is to be recorded at fair value, the gain or loss on repossession should be ......................................... .

Select one:

a.a $3,300 gain.

b. a $7,500 loss.

c. a $3,300 loss.

d. $0.