Lincraft Corp. reports a current ratio of 3-to-1 in its 20X2 financial statements. The statement of financial position shows current assets of $3,122,500 and current liabilities of $1,046,100. Lincraft has accounts receivable of $1,275,300. The company transfers $978,000 of these accounts receivable to a financial institution. There are $34,000 of bad debts associated with these accounts receivable, an amount that is already in the allowance for doubtful accounts. Proceeds of $891,650 are received from the transfer. The transfer is on a non-notification basis, which means that the customers pay Lincraft and Lincraft then remit the cash to the financial institution. The customers pay $938,800 to Lincraft on schedule, $34,000 is written off to the allowance at the appropriate time, and the cash remittance is forwarded to the financial institution