Company A transfers $700,000 in accounts receivable to Finance Company with recourse. Finance Company charges a 4% fee receivables factors with recourse. Company A estimates a $3,000 recourse liability. Finance Company will immediately remit 90% of the factored receivables to Company A and retain 10%. The fee is withheld from cash advance to Company A at the start of the arrangement. Company A estimates that the retained portion of the receivables is $58,000 (ignoring the factors fee). What is the amount of loss on sales of receivables reported by Company A?

A) 43,000

B) 40,000

C) 31,000

D) 28,000

Answer rating: 100% (QA)

Step 12 With recourse Factoring With recourse factoring does not consider comp... View the full answer