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-Maxwell Corporation factored, with recourse, $100,000 of accounts receivable with HuskieFinancing. The finance charge is 3%,...

-Maxwell Corporation factored, with recourse, $100,000 of accounts receivable with HuskieFinancing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns,and sales allowances. Maxwell estimates the recourse obligation at $2,400. What amount shouldMaxwell report as a loss on sale of receivables?

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Answer #1

Loss on sale of Receivables: 5,400

Accounts receivable    100,000.00
Finance Charge        3,000.00
Sale Discounts        5,000.00
Recourse obligation        2,400.00
Loss to be Recognised        5,400.00


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