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Gails Equine Adventures Inc. (GEA) uses the aging method for its accounts receivable. Pertinent facts for its year-ended December 31, 20x9 follow: January 1, 20X9
Gails Equine Adventures Inc. (GEA) uses the aging method for its accounts receivable. Pertinent facts for its year-ended December 31, 20x9 follow: January 1, 20X9 balance in the allowance for doubtful accounts - $45,000 Sales made during 20x9 - $2,000,000. 90% of sales were made on credit terms. - Accounts written off as uncollectible during the year - $60,000. Recovery of account previously written off during the year - $6,000. . Gross accounts receivables outstanding at December 31, 2079 - $320,000. During 20X9 GEA factored (sold) $150,000 of its accounts receivables on a without recourse basis for $135,000 cash. The aging schedule for GEA's receivables at December 31, 20x9 follows: 0-30 days 31-90 dyas >90 days Total Balance outstanding, December 31, 20X9 $230,000 $70,000 $20,000 $320,000 Estimated default rate 1% 2% 4% PUT YOUR ANSWER IN THE BOX FOLLOWING THE QUESTION - DO NOT INCLUDE A S SIGN IN YOUR ANSWER What amount will be charged to interest expense or loss on sale of accounts receivable when GEA records the factoring of ins receivables on a non-recourse basis
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