Logitech corporation transferred

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Reference no: EM13945593

Logitech Corporation transferred $105,000 of accounts receivable to a local bank. The transfer was made without recourse. The local bank remits 85% of the factored amount to Logitech and retains the remaining 15%. When the bank collects the receivables, it will remit to Logitech the retained amount less a fee equal to 2% of the total amount factored. Logitech estimates a fair value of its 15% interest in the receivables of $11,500 (not including the 2% fee).

What is the effect of this transaction on the company's assets, liabilities, and income before income taxes?





decrease by



would not change


Income before income taxes

decrease by



Reference no: EM13945593

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