Swifty Corporation factors $ 6500000 of its accounts receivables with recourse for a finance charge of 5%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. Swifty estimates the fair value of the recourse liability at $ 224000. What would be recorded as a gain (loss) on the transfer of receivables? O Gain of $325000. O Gain of $1199000. O Loss of $ 549000. O Loss of $ 224000.
Swifty Corporation factors $ 6500000 of its accounts receivables with recourse for a finance charge of 5%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. Swifty estimates the fair value of the recourse liability at $ 224000. What would be recorded as a gain (loss) on the transfer of receivables? O Gain of $325000. O Gain of $1199000. O Loss of $ 549000. O Loss of $ 224000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Swifty Corporation factors $ 6500000 of its accounts receivables with recourse for a finance charge of 5%. The finance company
retains an amount equal to 10% of the accounts receivable for possible adjustments. Swifty estimates the fair value of the recourse
liability at $ 224000. What would be recorded as a gain (loss) on the transfer of receivables?
O Gain of $ 325000.
O Gain of $ 1199000.
O Loss of $ 549000.
O Loss of $ 224000.
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Current Attempt in Progress
Swifty Corporation factors $ 6500000 of its accounts receivables with recourse for a finance charge of 5%. The finance company
retains an amount equal to 10% of the accounts receivable for possible adjustments. Swifty estimates the fair value of the recourse
liability at $ 224000. What would be recorded as a gain (loss) on the transfer of receivables?
O Gain of $ 325000.
O Gain of $ 1199000.
O Loss of $ 549000.
O Loss of $ 224000.
Save for Later
Attempts: 0 of 1 used
Submit Answer
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