acct exercises 494371

Ch. 9 – Uncollectible accounts – Accounts Receivable and Notes Receivable After you read the articles re-printed below, please post an answer to one of the questions, or you can post a comment related to this topic. Even if you are not a consumer whose account is being written off, you will be impacted as a consumer. Bank of America Writeoffs May Rise 10%, Analyst Says David Mildenberg July 6 (Bloomberg) — Bank of America Corp., the biggest U.S. lender, may report a 10 percent jump in uncollectible loans to $7.6 billion when second-quarter earnings are released this month, Credit Suisse said in a report. Bad debts included $1.9 billion tied to home equity, and about 10.4 percent of credit-card loans will be written off, analyst Moshe Orenbuch wrote today in the report. The Charlotte, North Carolina-based bank charged off $6.9 billion in the first quarter, he said. Bank of America, the biggest U.S. lender by assets and deposits, probably had a 32-cent-a-share profit for the quarter, including a $5.2 billion pretax gain from the sale of China Construction Bank Corp. shares, Orenbuch said. Excluding the gain and a $750 million assessment to replenish the Federal Deposit Insurance Corp.’s reserve fund, the bank probably lost 15 cents a share, he wrote. Chief Executive Officer Kenneth Lewis is under pressure from investors to show losses are under control when the bank reports results on July 17. U.S. stress tests in May predicted the company could face $136 billion in loan losses through 2010 in an extended recession. The bank completed a campaign in June to close the $33.9 billion capital gap identified in the stress tests, the most among 19 lenders examined. Loan-Loss Levels Bank of America expects charge-offs to increase for the second and third quarters, though at a lower rate than cited in the stress tests, Chief Financial Officer Joe Price said on a May 7 conference call. The tests assumed charge-offs will average $11.4 billion per quarter…