Intermediate Accounting: Reporting and Analysis, 2017 Update
2nd Edition
ISBN: 9781337116619
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Question
Chapter 13, Problem 22E
1.
To determine
Calculate the value of the impaired loan on December 31, 2016.
2.
To determine
Prepare
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Cozy Bank loaned a borrower P7,500,000 on January 1, 2018.
Problem 7-6 (IAA)
The terms of the loan were payment in full on
2023, plus annual interest payment at 12%.
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The interest payment was made as scheduled on
2019. However, due to financial setbacks, the borrower w
unable to make the 2020 interest payment.
January 1,
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cash flows from the loan on December 31, 2020.
The bank accrued the interest on December 31, 2019, but dia
not continue to accrue interest for 2020 due to th
impairment of the loan.
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Amount projected
on December 31, 2020
Date of cash flow
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December 31, 2022
December 31, 2023
December 31, 2024
500,000
1,000,000
2,000,000
4,000,000
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For two periods
For three periods
For four periods
0.89
0.80
0.71
0.64
Required:
1. Compute the present value of the loan receivable on
December 31, 2020.
2. Compute the impairment loss on the loan…
On January 1, 2017, Cheyenne Company issued a $1,224,300, 5-year, zero-interest-bearing
note to Ayayai Bank. The note was issued to yield 8% annual interest. Unfortunately, during
2018 Cheyenne fell into financial trouble due to increased competition. After reviewing all
available evidence on December 31, 2018, Ayayai Bank decided that the loan was impaired.
Cheyenne will probably pay back only $816,200 of the principal at maturity.
Yolo Corporation experienced financial difficulty in 2020. It decided to go into note receivable discounting to be able to ease some of its financing problems. During 2020, the following transactions relating to it transpired:
May 1 Discounted at the bank a 4-month, 10% interest bearing note receivable from a customer dated February 1, 2020, P400,000. Discount rate was 12%.
June 1 Bank informed Yolo that the 4-month note was honored and paid by its issuer.
June 30 Discounted at the bank an 8-month, non-interest bearing note receivable from a customer dated January 1, 2020, P200,000. Discount rate was 15%
August 1 Discounted at the bank a 180-day, 12% interest bearing note receivable dated
June 15, 2020, P300,000. Discount rate was 15%.
September 5 The bank informed Yolo that the 8-month note was in default. The full maturity value and protest fee of P5,000 was paid by Yolo the next day.
December 1 The customer paid the maturity value of the 8-month note, protest fee, and 10% interest…
Chapter 13 Solutions
Intermediate Accounting: Reporting and Analysis, 2017 Update
Ch. 13 - Prob. 1GICh. 13 - Provide brief definitions for the following terms:...Ch. 13 - Prob. 3GICh. 13 - Prob. 4GICh. 13 - Prob. 5GICh. 13 - Briefly summarize the accounting for an investment...Ch. 13 - Prob. 7GICh. 13 - Prob. 8GICh. 13 - Prob. 9GICh. 13 - Prob. 10GI
Ch. 13 - Prob. 11GICh. 13 - Prob. 12GICh. 13 - Prob. 13GICh. 13 - Prob. 14GICh. 13 - Briefly describe how to determine and record the...Ch. 13 - Prob. 16GICh. 13 - Prob. 17GICh. 13 - Prob. 18GICh. 13 - Prob. 19GICh. 13 - How does IFRS categorize minority passive...Ch. 13 - Prob. 21GICh. 13 - Prob. 22GICh. 13 - Prob. 23GICh. 13 - Prob. 24GICh. 13 - Prob. 25GICh. 13 - Prob. 26GICh. 13 - Prob. 27GICh. 13 - What is a fund? Distinguish between a fund and an...Ch. 13 - Prob. 29GICh. 13 - Prob. 30GICh. 13 - On January 1, 2016, Weaver Company purchased as...Ch. 13 - Prob. 2MCCh. 13 - Prob. 3MCCh. 13 - Prob. 4MCCh. 13 - Prob. 5MCCh. 13 - Prob. 6MCCh. 13 - A security in a portfolio of available-for-sale...Ch. 13 - Prob. 8MCCh. 13 - Cash dividends declared out of current earnings...Ch. 13 - Prob. 10MCCh. 13 - Prob. 1RECh. 13 - Prob. 2RECh. 13 - Prob. 3RECh. 13 - Prob. 4RECh. 13 - Prob. 5RECh. 13 - Prob. 6RECh. 13 - Prob. 7RECh. 13 - Prob. 8RECh. 13 - Prob. 9RECh. 13 - Prob. 10RECh. 13 - Prob. 11RECh. 13 - Prob. 12RECh. 13 - Prob. 13RECh. 13 - On January 1, Kilgore Inc. accepts a 20,000...Ch. 13 - Prob. 15RECh. 13 - Prob. 16RECh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Prob. 8ECh. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 17ECh. 13 - Prob. 18ECh. 13 - Prob. 19ECh. 13 - Prob. 20ECh. 13 - Prob. 21ECh. 13 - Prob. 22ECh. 13 - Prob. 23ECh. 13 - Prob. 24ECh. 13 - Prob. 25ECh. 13 - Prob. 26ECh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Trading Securities 8th State Bank prepares interim...Ch. 13 - Available-for-Sale Securities Holly Company...Ch. 13 - Investments in Equity Securities Noonan...Ch. 13 - Available-for-Sale Investments Manson Incorporated...Ch. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 1CCh. 13 - Investments in Securities Cane Company has two...Ch. 13 - Prob. 3CCh. 13 - Prob. 4CCh. 13 - Available-for-Sale Securities The following are...Ch. 13 - Prob. 6CCh. 13 - Prob. 7CCh. 13 - Prob. 8CCh. 13 - Prob. 9CCh. 13 - Prob. 10C
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