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Trell Corporation transferred $50,000 of accounts receivable to a local bank. The transfer was made without recourse . The local bank remits 80% of the
Trell Corporation transferred $50,000 of accounts receivable to a local bank. The transfer was made
without recourse. The local bank remits 80% of the factored amount to Trell and retains the remaining
20%. When the bank collects the receivables, it will remit to Trell the retained amount less a fee equal
to 3% of the total amount factored. Trell estimates a fair value of its 20% interest in the receivables of
$8,000 (not including the 3% fee). Trell will show an amount receivable from factor of:
a. $10,000.
b. $8,500.
c. $8,000.
d. $6,500.
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