Entel Inc Factored $100,000 of Its Accounts Receivable Without Recourse with with a Factor

question 23

Multiple Choice

Entel Inc. factored $100,000 of its accounts receivable without recourse with a factor and received $80,000. Of the $20,000 difference, $8,000 was the financing fee and the remainder was held back for sales adjustments. The firm and the factor agree to share equally the cost of any sales adjustments exceeding $12,000. Actual sales adjustments amounted to $14,000; the remaining amount of receivables was collected. What is the factor's net income from this factoring arrangement?

• A) $20,000
• B) $6,000
• C) $19,000
• D) $7,000
• E) $18,000

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Definitions:

Moral Judgments

The process of determining the ethical or moral value of actions, decisions, or intentions, based on a set of criteria or moral principles.

Second Language

The ability to speak, understand, read, and write a language that is not one's native language.

Linguistic Determinism

The hypothesis that language determines the structure of thought and perceptions of the world.

Language Influence

The effect that language has on perception, thought, and behavior, following the theory that the language we use shapes our understanding of the world around us.