Wilkinson Corporation Factored, with Guarantee (Recourse), $400,000 of Accounts Receivable

question 117

Multiple Choice

Wilkinson Corporation factored, with guarantee (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.What amount of cash would Wilkinson receive on the sale of receivables?

• A)$388,000.
• B)$380,000.
• C)$368,000.
• D)$400,000.

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Definitions:

Joint Cost

Costs incurred during the process of producing two or more products at the same time, where the costs cannot be easily separated for each product.

Oat Bran

The outer layer of the oat grain, rich in dietary fiber and nutrients.

Milling

The process of grinding, crushing, or cutting material into smaller pieces or powder, commonly used in food processing and metalworking.

Uncontrollable Costs

Expenses that cannot be directly modified or controlled by a company's management in the short term, often due to external factors.