The controller for Riverbed Corporation has reached an agreement with Concord Financing Ltd. to sell a large portion of Riverbed'spast-due accounts receivable. Riverbed agrees to sell $1,950,000 of accounts receivable to Concord with recourse. Riverbed'scontroller estimates that the fair value of Riverbed's liability to pay Concord for uncollectible accounts is $177,000. Concord willcharge Riverbed 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%.(a)- Your answer is partially correctCalculate the net proceeds and the gain or loss on the disposal of receivables to Concord Financing LtdNet proceeds1657500Loss on disposal of receivables$233500i

First, we need to calculate the financing fee that Concord will charge Riverbed. This is 7% of the…

Answered: The controller for Riverbed Corporation…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2
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The controller for Riverbed Corporation has reached an agreement with Concord Financing Ltd. to sell a large portion of Riverbed's past-due accounts receivable. Riverbed agrees to sell $1,950,000 of accounts receivable to Concord with recourse. Riverbed's controller estimates that the fair value of Riverbed's liability to pay Concord for uncollectible accounts is $177,000. Concord will charge Riverbed 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%. (a) - Your answer is partially correct Calculate the net proceeds and the gain or loss on the disposal of receivables to Concord Financing Ltd Net proceeds 1657500 Loss on disposal of receivables $ 233500 i

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