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Tera-In Problems Problem 6 Sales with Recouse A Change of Art (a tattoo removal company) sells (factors) $400,000 of accounts receivable to Factor, Inc. yith
Tera-In Problems Problem 6 Sales with Recouse A Change of Art (a tattoo removal company) sells (factors) $400,000 of accounts receivable to Factor, Inc. yith recourse. Factor, Inc. charges a 2% finance charge, and retains 4% of receivables for possible ndjustments due to sales discounts or returms. A Change of An estimates the recourse obligation is $5,000 (estimated amount of receivables that won't be collected) Record the sale from A Change of Art's perspective Six days after the sale of receivables to Factor, Inc. one ustomer files for bankruptcy. They owe $1,000 in AR. Record this from A Change of Art's perspective Record this from Factor, Inc.'s perspective: 109
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