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sun inc factors 2,000,000 of its accounts receivables withou recourse for a finance charge of 5%. the company retains equal to 10% of the accounts recevable for possible adjustments. sun estimates of the recourse liabilitty at 75,000. What would be recorded as gain or loss on the transfer of receivables?

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abiolataiwo2015

Answer:

$100,000

Explanation:

Calculation for What would be recorded as gain or loss on the transfer of receivables

Account receivable 2,000,000

Less Cash 1,700,000

(2,000,000*85%)

Due from Factor account 200,000

(2,000,000*10%)

Loss on sales of receivable $100,000

Therefore What would be recorded as gain or loss on the transfer of receivables will be $100,000

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