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 30000 was sold for 55000 in 2012.
Collections on this sale were 20000 in 2012, 15000 in 2013, and 20000 in 2014.