The controller for Riverbed Corporation has reached an agreement with Concord Financing Ltd. to sell a large portion of Riverbed's past-due accounts receivable. Riverbed agrees to sell $1,950,000 of accounts receivable to Concord with recourse. Riverbed's controller estimates that the fair value of Riverbed's liability to pay Concord for uncollectible accounts is $177,000. Concord will charge Riverbed 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%. (a) - Your answer is partially correct Calculate the net proceeds and the gain or loss on the disposal of receivables to Concord Financing Ltd Net proceeds 1657500 Loss on disposal of receivables $ 233500 i
The controller for Riverbed Corporation has reached an agreement with Concord Financing Ltd. to sell a large portion of Riverbed's past-due accounts receivable. Riverbed agrees to sell $1,950,000 of accounts receivable to Concord with recourse. Riverbed's controller estimates that the fair value of Riverbed's liability to pay Concord for uncollectible accounts is $177,000. Concord will charge Riverbed 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%. (a) - Your answer is partially correct Calculate the net proceeds and the gain or loss on the disposal of receivables to Concord Financing Ltd Net proceeds 1657500 Loss on disposal of receivables $ 233500 i
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 16P
Related questions
Question
![The controller for Riverbed Corporation has reached an agreement with Concord Financing Ltd. to sell a large portion of Riverbed's
past-due accounts receivable. Riverbed agrees to sell $1,950,000 of accounts receivable to Concord with recourse. Riverbed's
controller estimates that the fair value of Riverbed's liability to pay Concord for uncollectible accounts is $177,000. Concord will
charge Riverbed 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%.
(a)
- Your answer is partially correct
Calculate the net proceeds and the gain or loss on the disposal of receivables to Concord Financing Ltd
Net proceeds
1657500
Loss on disposal of receivables
$
233500
i](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcba88c07-8459-49d4-b992-40d1de871397%2Fc49ab1d3-188a-41f2-8bdf-882c549573dd%2Fhcuji9e_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The controller for Riverbed Corporation has reached an agreement with Concord Financing Ltd. to sell a large portion of Riverbed's
past-due accounts receivable. Riverbed agrees to sell $1,950,000 of accounts receivable to Concord with recourse. Riverbed's
controller estimates that the fair value of Riverbed's liability to pay Concord for uncollectible accounts is $177,000. Concord will
charge Riverbed 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%.
(a)
- Your answer is partially correct
Calculate the net proceeds and the gain or loss on the disposal of receivables to Concord Financing Ltd
Net proceeds
1657500
Loss on disposal of receivables
$
233500
i
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