Digitex Inc. factored $50,000 of its accounts receivable with recourse. The factor retained 8% for sales adjustments
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Question:
Digitex Inc. factored $50,000 of its accounts receivable with recourse. The factor retained 8% for sales adjustments and charged $3,000 as a financing fee. Estimated and actual amounts are as follows:
Sales adjustments | $2,500 |
Uncollectible accounts | 500 |
Assume the transfer is recorded as a sale by Digitex. What is the loss to be recognized on the transfer?
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