The controller for Bramble Corporation has reached an agreement with Sheffield Financing Ltd. to sell a large portion of Bramble's past-due accounts receivable. Bramble agrees to sell $1,820,000 of accounts receivable to Sheffield with recourse. Bramble's controller estimates that the fair value of Bramble's liability to pay Sheffield for uncollectible accounts is $163.000. Sheffield will charge Bramble 9% of the total receivables balance as a financing fee, and will withhold an initial amount of 10% (a) Calculate the net proceeds and the gain or loss on the disposal of receivables to Sheffield Financing Ltd. Net proceeds on disposal of receivables $ $
The controller for Bramble Corporation has reached an agreement with Sheffield Financing Ltd. to sell a large portion of Bramble's past-due accounts receivable. Bramble agrees to sell $1,820,000 of accounts receivable to Sheffield with recourse. Bramble's controller estimates that the fair value of Bramble's liability to pay Sheffield for uncollectible accounts is $163.000. Sheffield will charge Bramble 9% of the total receivables balance as a financing fee, and will withhold an initial amount of 10% (a) Calculate the net proceeds and the gain or loss on the disposal of receivables to Sheffield Financing Ltd. Net proceeds on disposal of receivables $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![The controller for Bramble Corporation has reached an agreement with Sheffield Financing Ltd. to sell a large portion of Bramble's
past-due accounts receivable. Bramble agrees to sell $1,820,000 of accounts receivable to Sheffield with recourse. Bramble's controller
estimates that the fair value of Bramble's liability to pay Sheffield for uncollectible accounts is $163.000. Sheffield will charge Bramble
9% of the total receivables balance as a financing fee, and will withhold an initial amount of 10%
(a)
Calculate the net proceeds and the gain or loss on the disposal of receivables to Sheffield Financing Ltd.
Net proceeds
✓on disposal of receivables
S
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa1d69cc4-d03c-4765-a53c-aebbda5e6fe4%2Fa1a72ebc-3520-425c-bffe-8d30875a55b6%2Fp8f86ir_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The controller for Bramble Corporation has reached an agreement with Sheffield Financing Ltd. to sell a large portion of Bramble's
past-due accounts receivable. Bramble agrees to sell $1,820,000 of accounts receivable to Sheffield with recourse. Bramble's controller
estimates that the fair value of Bramble's liability to pay Sheffield for uncollectible accounts is $163.000. Sheffield will charge Bramble
9% of the total receivables balance as a financing fee, and will withhold an initial amount of 10%
(a)
Calculate the net proceeds and the gain or loss on the disposal of receivables to Sheffield Financing Ltd.
Net proceeds
✓on disposal of receivables
S
$
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