On February 1, 2017, Strawberry Corp

question 54

Multiple Choice

On February 1, 2017, Strawberry Corp.factored receivables with a carrying amount of $250,000 to Shortcake Inc.Shortcake assessed a finance charge of 3% of the receivables and retained 5% of the receivables.Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Strawberry Corp.for February.Assume that Strawberry factors the receivables on a without recourse basis.The loss to be reported is

• A)$ 0.
• B)$7,500.
• C)$15,000.
• D)$14,550.

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