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    Loss on repossession of furniture

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    Seeman Furniture uses the installment sales method. No further collections could be made on an account with a balance of $12,000. It was estimated that the repossessed furniture could be sold as is for $3,600, or for $$4,200 if $200 were spent reconditioning it. The gross profit rate on the original sale was 40%. What was loss on repossession?

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    Solution Summary

    The loss of repossession of furniture for a gross profit rate of 40% is determined.