Dynasty Inc. has the following partial balance sheet as of December 31, 2012: Assets: Cash 57,000 Accounts Receivable 73,000 Inventory 124,565 Building 300,000 Land 100,000 All accounts receivable are short- term with terms of 01 year or under. The receivables are not backed by collateral and have a 100 % exposure rate. The default probability is calculated by averaging the previous 3-years of losses percentage. Losses percentage is calculated as follows:

Year -- Accounts Receivable -- 12/31/20XX -- Write-offs // Recoveries

2008 $50,000 $1,800 $300

2009 74,000 3,000 $0

2010 64,000 1,100 $220

2011 46,000 1,750 $500

2012 73,000 2,100 $100 Additionally, the company determines its recovery rate by averaging the previous 5 years recoveries by the write offs. Calculate the expected loss for 2013.

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