Question

The following information relates to Zulu Company’s accounts receivable for 2014:
Accounts receivable, 1/1/2014 ....... $ 750,000
Credit sales for 2014 ............ 3,100,000
Accounts written off during 2014 ........ 45,000
Collections from customers during 2014 .... 2,400,000
Estimated uncollectible accounts at 12/31/2014 . 95,000

A factor has recently offered to purchase all of Zulu’s outstanding receivables without recourse for 94% of their face amount.

Required:
At what net amount should Zulu report its receivables assuming the company chooses to measure financial assets at fair value?




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  • CreatedSeptember 10, 2014
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