What type of account should the company credit

Reference no: EM131880968

Question: 1) At the beginning of the second quarter (Q2), Acme had an Allowance for Uncollectible Accounts that totaled $30,000. During Q2, $12,000 of specific receivables were written off due to customer bankruptcies. At the end of Q2, Acme determines an allowance of $37,000 is appropriate. What amount of Bad Debt Expense should Acme report in its Q2 income statement?

2) At the end of the fourth quarter (Q4), Acme had $50,000 in accounts receivable outstanding. However, based on past experience, it only expected to collect $42,000 in cash from those receivables. Acme began Q4 with an allowance for doubtful accounts balance of $6,000 and during the quarter wrote off $3,000 in accounts that it determined to be uncollectable. How much Bad Debt Expense should Acme report in its Q4 income statement?

3) A company might decide to use its accounts receivable to obtain immediate access to cash, either by selling them or pledging them as collateral for a loan. In either case, the cash received would be recorded as a debit to cash. If the arrangement is deemed a sale, what type of account should the company credit? Ignore any fees. Asset Contra Asset Liability Revenue

Reference no: EM131880968

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