Wilkinson Corporation Factored, with Recourse, $400,000 of Accounts Receivable with Huskie

question 27

Multiple Choice

Wilkinson Corporation factored, with recourse, $400,000 of accounts receivable with Huskie Financing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns, and sales allowances. Wilkinson estimates the recourse obligation at $9,600. What amount should Wilkinson report as a loss on sale of receivables?

• A) $ -0-.
• B) $12,000.
• C) $21,600.
• D) $41,600.

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Definitions:

Rotator Cuff

A group of muscles and tendons that surround the shoulder joint, supporting and enabling various arm movements.

Glenoid Fossa

A shallow depression in the scapula that articulates with the head of the humerus, forming the shoulder joint.

Scapula

A bone that connects the humerus (upper arm bone) with the clavicle (collar bone) and is commonly known as the shoulder blade.

Clavicle

The collarbone, between the sternum and scapula.