Ask Question
8 June, 09:44

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

+3
Answers (1)
  1. 8 June, 11:05
    0
    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.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Sun Inc. factors $6,000,000 of its accounts receivables without recourse for a finance charge of 3%. The finance company retains an amount ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers