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Flashcards: Revenue Recognition
The Martino Corporation, in attempt to raise revenues, begins selling goods with an automatic right to return within six months if not completely satisfied. On November 1, $35,000 worth of goods with a cost of $22,000 are sold. Company officials expect that 15% of the goods sold will be returned before the expiration date in the following year. How much gross profit should be recognized on this sale in the current year?
$11,050
$22,000
$29,750
$13,000
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