Question

On December 1, Altona Winery sells $100,000 of its accounts receivable and is charged a 5 percent factoring fee. What is the total amount charged as factoring fee?

1) $5,000
2) $10,000
3) $15,000
4) $20,000

Answer 1

The total amount charged as a factoring fee by Altona Winery for selling $100,000 of accounts receivable at a 5 percent fee is $5,000.

Step-by-step explanation:

The question asks us to calculate the total amount charged as a factoring fee by Altona Winery when it sells $100,000 of its accounts receivable at a 5 percent fee. To find the factoring fee, we multiply the total amount of accounts receivable by the factoring fee percentage.

The calculation is as follows:

$100,000 × 0.05 = $5,000

Therefore, the total amount charged as a factoring fee is $5,000.