The required loss allowance at Dec. 31, 2020 is? Please include solutions. Thank you! The following information pertains to Lender A's loan portfolio at December 31, 2020:• Lender A considers all loans over 90 days past due to be credit-impaired based onhistorical experience with recovering the associated debt.• The aging of Lender A's loans on December 31, 2020 follows:CurrentP1,400,000More than 30 days past dueMore than 60 days past dueMore than 90 days past due75,000100,000125,000TotalP1,700,000• Lender A monitors certain loans more closely on an individual basis given their significanceand unique characteristics. These loans are not included in the P1,700,000 loan portfolio.The following information is available without undue cost or effort on an individual loanbasis:LoanAmountPast DueStatus PV of Expected Future Cash FlowsP200,000150,000190 daysP180,000CurrentNot calculated350,00060 days37,000Other information:Loan 1- The borrower has filed for bankruptcy.Loan 2 – NoneLoan 3 - The borrower recently lost his job due to an economic recession and wasgranted a concession to skip payments.Additional information taking into account historical information, current conditions and forwardlooking information, including actual loss experience and recoveries from the sale of collateral,is as follows: Probability of default in the next 12 months 2% Lifetime probability of defaultCredit-impaired loans 100% Not credit-impaired loans 5% Loss given default on all loans 25%17. The required loss allowance at Dec. 31, 2020 is

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The required loss allowance at Dec. 31, 2020 is

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 11EB: Outpost Designs uses the balance sheet aging method to account for uncollectible debt on...

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Question

100%

The required loss allowance at Dec. 31, 2020 is?

Please include solutions. Thank you!

The following information pertains to Lender A's loan portfolio at December 31, 2020:
• Lender A considers all loans over 90 days past due to be credit-impaired based on
historical experience with recovering the associated debt.
• The aging of Lender A's loans on December 31, 2020 follows:
Current
P1,400,000
More than 30 days past due
More than 60 days past due
More than 90 days past due
75,000
100,000
125,000
Total
P1,700,000
• Lender A monitors certain loans more closely on an individual basis given their significance
and unique characteristics. These loans are not included in the P1,700,000 loan portfolio.
The following information is available without undue cost or effort on an individual loan
basis:
Loan
Amount
Past Due
Status PV of Expected Future Cash Flows
P200,000
150,000
1
90 days
P180,000
Current
Not calculated
3
50,000
60 days
37,000
Other information:
Loan 1- The borrower has filed for bankruptcy.
Loan 2 – None
Loan 3 - The borrower recently lost his job due to an economic recession and was
granted a concession to skip payments.
Additional information taking into account historical information, current conditions and forward
looking information, including actual loss experience and recoveries from the sale of collateral,
is as follows: Probability of default in the next 12 months 2% Lifetime probability of default
Credit-impaired loans 100% Not credit-impaired loans 5% Loss given default on all loans 25%
17. The required loss allowance at Dec. 31, 2020 is

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