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Volgvan
3 years ago
7

Sun Inc. factors $6,000,000 of its accounts receivables without recourse for a finance charge of 3%. The finance company retains

an amount equal to 10% of the accounts receivable for possible adjustments. If it were a transaction with recourse, Sun would have estimated the fair value of the recourse liability at $300,000. What would be recorded as a gain (loss) on the transfer of receivables
Business
1 answer:
PIT_PIT [208]3 years ago
8 0

Answer:

Loss $180,000

Explanation:

Accounts Receivable             $6,000,000

Factor fees 3%*6,000,000     $180,000

Loss of $180,000 will be recorded for transfer of receivable without recourse to the factor.

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4 years ago
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