Logitech corporation transferred $105,000 of accounts receivable to a local bank. the transfer was made without recourse. the local bank remits 90% of the factored amount to logitech and retains the remaining 10%. when the bank collects the receivables, it will remit to logitech the retained amount less a fee equal to 3% of the total amount factored. logitech estimates a fair value of its 10% interest in the receivables of $8,000 (not including the 3% fee

Asset will decrease by 5,650

Increase in cash by 94,500

Explanation:

Asset reduction = Cash x %of factored amount

= 105,000 x 0.90 = 94,500 cash increment

Receivables

(8,000 - 3% fee of total amount factored)

3% of total amount = 105,000 x 0.003 = 3,150

therefore, Receivables = 8,000 - 3,150

                                    = 4,850

Therefore Net decrease = Cash - Cash Increment - Receivables

                                       = 105,000 -  94,500 - 4,850

                                      = 5,650

Therefore, decrease in asset is by 5,650

Income before income taxes decreases by $5,7650 which is loss on receivables sales ).

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.

answer; automated fingerprint;