Carie Corp. enters into an arrangement with Wilson Enterprises whereby Wilson will assume $100,000 of Caries receivables
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Carie Corp. enters into an arrangement with Wilson Enterprises whereby Wilson will assume $100,000 of Carie’s receivables for a 6% fee. These receivables have a related allowance for uncollectible accounts of $3,500. If Carie estimates the recourse obligation to be $4,000, which one of the following statements is true regarding the impact to Carie\\\'s financial statements?
a) Net income on the income statement will decrease by $6,500.
b) Liabilities on the balance sheet will increase by $6,000
c) Total assets on the balance sheet will decrease by $6,500
d) Equity on the balance sheet will increase by $6,000
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1337788281
3rd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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