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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Definitions:

Reordering Cost

Expenses associated with placing additional orders for inventory, including logistics, processing, and communication costs.

Sequencing

The order in which the steps need to occur to produce a product.

Routing

The process of selecting paths in a network along which to send network traffic.

Dispatching

The process of sending out goods or deploying resources to a particular destination or for a specific task.