Peggy Is in the Business of Factoring Accounts Receivable

question 105

Multiple Choice

Peggy is in the business of factoring accounts receivable.Last year, she purchased a $30,000 account receivable for $25,000.This year, the account was settled for $25,000.How much loss can Peggy deduct and in which year?

• A)$5,000 for the current year.
• B)$5,000 for the prior year and $5,000 for the current year.
• C)$5,000 for the prior year.
• D)$10,000 for the current year.
• E)None of these.

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Definitions:

Healthcare Prices

The cost associated with medical services and products, which can vary widely depending on a variety of factors.

Economize

The act of using resources efficiently, especially to reduce costs.

Payroll Tax

A tax imposed on employers or employees, and is usually calculated as a percentage of the salaries that employers pay their staff.

Medicare Beneficiaries

Individuals who are eligible to receive health care benefits under the Medicare program, typically those aged 65 and over or with certain disabilities.