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On February 1, 2010, Henson Company factored receivables with a carrying amount of $300,000 to Agee Company.Agee Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables.Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Henson Company for February.
-Assume that Henson factors the receivables on a with guarantee (recourse) basis.The amount of cash received is

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The finance charge is 3% of the $300,000 receivables, which is $9,000. 
Agee Company retains 5% of the receivables, which is $15,000 ($300,000 x 5%). 
Thus, the cash received by Henson Company is $276,000 ($300,000 - $9,000 - $15,000). 
Since the transaction is with recourse, Henson Company is responsible for any unpaid receivables that Agee Company is unable to collect. 
Therefore, a loss on sale is recognized for the estimated amount of uncollectible receivables. Without information on the estimated amount of uncollectible receivables, we cannot determine the amount of loss on sale to be reported in the income statement of Henson Company for February.

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