On February 1, 2014, Henson Company factored receivables with a carrying amount of $500,000 to Agee Company. Agee Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Henson Company for February.Assume that Henson factors the receivables on a without recourse basis. The loss to be reported is

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The loss on sale is calculated as the finance charge plus the amount retained minus any proceeds received. Here, the finance charge is 3% of $500,000, which is $15,000. Since the receivables are factored without recourse, there's no additional loss beyond the finance charge, making the total loss $15,000.

On February 1, 2014, Henson Company Factored Receivables with a Carrying