Maxwell Corporation Factored, with Recourse, $100,000 of Accounts Receivable with Huskie

question 59

Multiple Choice

Maxwell Corporation factored, with recourse, $100,000 of accounts receivable with Huskie Financing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns, and sales allowances. Maxwell estimates the recourse obligation at $2,400. What amount should Maxwell report as a loss on sale of receivables?

• A) $ -0-.
• B) $3,000.
• C) $5,400.
• D) $10,400.

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