Assume that the transfer qualifies as a sale and the

Reference no: EM13570927

(A)Your company is in need of quick cash to afford a project opportunity, so the firm decides to factor $100,000 of its receivables without recourse instead of waiting for collections. Assume that the transfer qualifies as a sale, and the institution purchasing the receivables pays $90,000. $3,000 of the amount kept is for a fee and the rest will be remitted after collections are made. $5,000 is the fair value of the amount to be remitted at a later date (receivable).

(1) Compute the gain or loss on the transfer of the receivables

Reference no: EM13570927

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