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Bob owns a collection agency. He purchases uncollected accounts receivable from other businesses at 75% of their face value and then attempts to collect these accounts. During the current year, Bob collected $66,800 on an account with a face value of $80,160.

Bob owns a collection agency. He purchases uncollected accounts receivable from other businesses at 75% of their face value and then attempts to collect these accounts. During the current year, Bob collected $66,800 on an account with a face value of $80,160.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bob owns a collection agency. He purchases uncollected accounts receivable from other businesses at 75% of their face value and then attempts to collect these accounts. During the current year, Bob collected $66,800 on an account with a face value of $80,160. Bob has **no bad** debt deduction. He has **income** of $____________.
Transcribed Image Text:Bob owns a collection agency. He purchases uncollected accounts receivable from other businesses at 75% of their face value and then attempts to collect these accounts. During the current year, Bob collected $66,800 on an account with a face value of $80,160. Bob has **no bad** debt deduction. He has **income** of $____________.
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