What is the carrying value of the loans receivable as of December 31, 2022 after impairement recognition A. 8,123,0231B. 8,000,000C . 8,211,570D, 9,211,570 On December 31, 2019, Leni Company, a financing institution lent P10,000,000 to Digong Corp. due 3 years after. The loan is supported by an 10% note receivable.Based on the company's initial estimates the present value of the 12 months expected credit loss (ECL) discounted at 9% is at 1,000,000. The probability of default(PD) is at 5%.Leni Company was able to collect interest as it became due at the end of 2020. There was no evidence of significant increase in credit risk by the end 2020 and thatthe receivable is determined to have "low credit risk". There were no changes in its initial estimate of the 12 months expected credit loss either.By the end of 2021, Leni Company was able to collect interest as it became due. Based on available forward-looking information (determinable without undue cost oreffort), however, there is an evidence that there was a significant increase in credit risk by the end of 2021. Leni Company therefore had to change its basis ofcalculation of the loss allowance from 12 months ECL to lifetime expected credit loss. The present value of the lifetime expected credit loss discounted at 9% is at4,000,000. The probability of default (PD) is at 20%.During 2022, however, due to Digong Corp's business deterioration and significant financial difficulties, the company was not able to collect amounts due at the end2022. After reviewing all available evidence at December 31, 2022. Leni Company determined that the receivable is credit-impaired and that impairment loss shouldbe recognized. Leni Company also entered into the following concessions with Digong Corp.A. Interest due in 2022 is waived.B. Only 8M of the principal shall be collected in 2 equal installments, at the end of 2023 and 2024.C. Annual interest on the 8M revised principal shall be collected at 12% at the end of each year for the next two years (based on outstanding balance).As of December 31, 2022, the prevailing rate of interest for all debt instruments is 14%.What is the carrying value of the loans receivable as of December 31, 2022 after impairment recognition?

The net worth of an asset or liability as it shows on the company's balance sheet is known as the…

Answered: What is the carrying value of the loans…

What is the carrying value of the loans receivable as of December 31, 2022 after impairement recognition A. 8,123,0231 B. 8,000,000 C . 8,211,570 D, 9,211,570

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 61P

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On December 31, 2019, Leni Company, a financing institution lent P10,000,000 to Digong Corp. due 3 years after. The loan is supported by an 10% note receivable. Based on the company’s initial estimates the present value of the 12 months expected credit loss (ECL) discounted at 9% is at 1,000,000. The probability of default (PD) is at 5%. Leni Company was able to collect interest as it became due at the end of 2020. There was no evidence of significant increase in credit risk by the end 2020 and that the receivable is determined to have “low credit risk”. There were no changes in its initial estimate of the 12 months expected credit loss either. By the end of 2021, Leni Company was able to collect interest as it became due. Based on available forward-looking information (determinable without undue cost or effort), however, there is an evidence that there was a significant increase in credit risk by the end of 2021. Leni Company therefore had to change its basis of calculation of the…
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CPA Bank Co. loaned P4,000,000 to a borrower on January 1, 2018. The terms of the loan require principal payments of P800,000 each year for 5 years plus interest at 8%.The first principal and interest payment is due on January 1, 2019. The borrower made the required payments during 2019 and 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectability of the loan. On December 31, 2020, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020. The present value of 1 at 8% is 0.93 for one period, O.86 for two periods and 0.79 for three periods. At what amount is loan receivable presented in the statement of financial position on December 31, 2021?
Solid Bank loaned P5,000,000 to a borrower on January 1, 2018. The terms of the loan require principal payments of P1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment are due on January 1, 2019. The borrower made the required payments during 2019 and to 2020. However, during 2020 the borrower began to experience financial difficulties, requiring the bank to reassess the collectability of the loan. vnGomo) au9 Vd bonsbneu 6w lodio 69y tne ert On December 31, 2020, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2020.o 82 o1 1supe b6dblori e beniste16 bns PE to est s bs261obstert Present value of 1 at 8%vs beidpiew s no belugmo j2oi bap ab obsi snl.noitibe nl For one period For two periods For three periods 0.926 avsb D21o glnevis91 2nu6 Sonitotisteri mort bovia 0.857 ini rdabo to inuoms ei…
On January 1, 2019, Zoom Bank provided a loan of P4,000,000 to D Company. Under the loan agreement, the effective interest rate is 10% and that D Company is to pay the annual interest every December 31. The principal amount of the loan is due on December 31, 2023.On December 31, 2019, Zoom Bank needs to measure the 12-month expected credit loss for the loan. Zoom Bank determined that the probability of the loan being in default over the next 12 months is 1% and that 20% of the gross carrying amount will be lost over the term of the loan; i.e., Loan Given Default (LGD) is 20% and Probability of Collection is 80%. The 12-month expected credit loss allowance has been determined to be P18,140.On December 31, 2020, Zoom Bank has determined that there is significant increase in the credit risk of the loan receivable. The probability of the loan being in default over the life of the loan is 10% and the LGD is 25% of the gross carrying amount. The present value of 1 at 10% for three periods is…
On December 31, 2020, JKL Bank granted a P5,000,000 loan to a borrower with 10% stated rate payable annually and maturing in 5 years. The loan was discounted at the market interest rate of 12%. Unfortunately, the financial condition of the borrower worsened because of lower revenue. On December 31 ,2022, the bank determined that the borrower would pay back only P3,000,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid on the P5,000,000 loan. The present value of 1 at 12% is 0.57 for five periods and 0.71 for three periods. In addition, the present value of an ordinary annuity of 1 at 12% is 3.60 for five periods and 2.40 for three periods. Compute for the impairment loss on loan receivable to be recognized in 2022?
On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a major customer, through non–interest-bearing note due in 5 years. Because the note was non–interest-bearing, Flounder Furniture agreed to sell furniture to this customer at lower than market price. A 11% rate of interest is normally charged on this type of loan.Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the amount that the note would be recorded at on January 1, 2020. (Hint: Refer to Chapter 3 for tips on calculating.) Please help within Excel
On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a major customer, through non–interest-bearing note due in 5 years. Because the note was non–interest-bearing, Flounder Furniture agreed to sell furniture to this customer at lower than market price. A 11% rate of interest is normally charged on this type of loan.Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the amount that the note would be recorded at on January 1, 2020. (Hint: Refer to Chapter 3 for tips on calculating.) Please show solution in Excel
On December 31, 2020, JKL Bank granted a P5,000,000 loan to a borrower with 10% stated rate payable annually and maturing in 5 years. The loan was discounted at the market interest rate of 12%. Unfortunately, the financial condition of the borrower worsened because of lower revenue. On December 31 ,2022, the bank determined that the borrower would pay back only P3,000,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid on the P5,000,000 loan. The present value of 1 at 12% is 0.57 for five periods and 0.71 for three periods. In addition, the present value of an ordinary annuity of 1 at 12% is 3.60 for five periods and 2.40 for three periods. Compute for the amount of cash paid to the borrower on December 31, 2020