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Chapter%207_LR%20Valix%202023%20Answer

Chapter 7 discusses loan receivables, detailing interest income, amortization, and carrying amounts for various loans over multiple years. It includes calculations for present value of cash flows, impairment losses, and schedules of payments from borrowers. The chapter provides a comprehensive overview of financial reporting related to loans, including expected credit losses and allowances for loan impairments.

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9 views6 pages

Chapter%207_LR%20Valix%202023%20Answer

Chapter 7 discusses loan receivables, detailing interest income, amortization, and carrying amounts for various loans over multiple years. It includes calculations for present value of cash flows, impairment losses, and schedules of payments from borrowers. The chapter provides a comprehensive overview of financial reporting related to loans, including expected credit losses and allowances for loan impairments.

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hermionepovadora
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 7- Loan Receivable Valix 2023

#7-1 INTEREST INTEREST DISCOUNT CARRYING #7-2 INTEREST INTEREST PREMIUM CARRYING
DATE RECEIVED INCOME AMORTIZATION AMOUNT DATE RECEIVED INCOME AMORTIZATION AMOUNT
Jan1 2023 3,807,900 Jan1 2023 3,160,300
12/31/23 400,000 456,948 56,948 3,864,848 12/31/23 240,000 189,618 50,382 3,109,918
12/31/24 400,000 463,782 63,782 3,928,630 12/31/24 240,000 186,595 53,405 3,056,513
12/31/25 400,000 328,630 71,370 4,000,000 12/31/25 240,000 183,487 56,513 3,000,000

Jan1 2023 L/R 4,000,000 Jan1 2023 L/R 3,000,000


Cash 4,000,000 Cash 3,000,000

Cash 342,100 Cash 100,000


Unearned Interest Income 342,100 Direct Origination Cost 100,000

Unearned Interest Income 150,000 Direct Origination Cost 260,300


Cash 150,000 Cash 260,300

12/31/23 Cash 400,000 12/31/23 Cash 240,000


Interest Income 400,000 Interest Income 240,000

Unearned Interest Income 56,948 Interest Income 50,382


Interest Income 56,948 Direct Origination Cost 50,382

12/31/24 Cash 400,000 12/31/24 Cash 240,000


Interest Income 400,000 Interest Income 240,000

Unearned Interest Income 63,782 Interest Income 53,405


Interest Income 63,782 Direct Origination Cost 53,405

12/31/25 Cash 400,000 12/31/25 Cash 240,000


Interest Income 400,000 Interest Income 240,000

Unearned Interest Income 71,370 Interest Income 56,513


Interest Income 71,370 Direct Origination Cost 56,513

Cash 4,000,000 Cash 3,000,000


L/R 4,000,000 L/R 3,000,000
#7-3 Present Value of Cash Flows #7-4 Present Value of Cash Flows
12/31/26 1,000,000 0.93 930,000 12/31/25 500,000 0.89 445,000
12/31/27 2,000,000 0.86 1,720,000 12/31/26 1,000,000 0.80 800,000
12/31/28 3,000,000 0.79 2,370,000 12/31/27 2,000,000 0.71 1,420,000
Total Present Value of Cash Flows 5,020,000 12/31/28 4,000,000 0.64 2,560,000
Total Present Value of Cash Flows 5,225,000
Carrying Amount of Loan 6,480,000
Present Value of Cash Flows -5,020,000 Carrying Amount of Loan 8,400,000
Impairment Loss 1,460,000 Present Value of Cash Flows -5,225,000
Impairment Loss 3,175,000
12/31/25 Loan Impairment Loss 1,460,000
Accrued Interest Receivable 480,000 12/31/24 Loan Impairment Loss 3,175,000
Allowance for Loan Impairment 980,000 Accrued Interest Receivable 900,000
Allowance for Loan Impairment 2,275,000
12/31/26 Cash 1,000,000
L/R 1,000,000 12/31/25 Cash 500,000
L/R 500,000
Allowance for Loan Impairment 401,600
Interest Income 401,600 Allowance for Loan Impairment 627,000
Interest Income 627,000
12/31/27 Cash 2,000,000
L/R 2,000,000 12/31/26 Cash 1,000,000
L/R 1,000,000
Allowance for Loan Impairment 353,728
Interest Income 353,728 Allowance for Loan Impairment 642,240
Interest Income 642,240
12/31/28 Cash 3,000,000
L/R 3,000,000 12/31/27 Cash 2,000,000
L/R 2,000,000
Allowance for Loan Impairment 224,672
Interest Income 224,672 Allowance for Loan Impairment 599,309
Interest Income 599,309

12/31/28 Cash 4,000,000


L/R 4,000,000

Allowance for Loan Impairment 406,451


Interest Income 406,451
#7-5 Schedule of Payments from the Borrower #7-6 Jan1 2026 1,000,000 1.00 1,000,000
12/31/24 No interest payment 0 Jan1 2027 1,000,000 0.93 930,000
12/31/25 No interest payment 0 Jan1 2028 1,000,000 0.86 860,000
12/31/26 Interest payment (4M x 9%) 360,000 Total Present Value of Loan 2,790,000
12/31/27 Interest payment 360,000
12/31/28 Interest payment 360,000 Loan Receiveable 3,000,000
12/31/29 Interest payment 360,000 Present Value of Loan -2,790,000
Principal payment 4,000,000 Impairment Loss 210,000

12/31/26 360,000 0.77 277,200 Jan.1 2023 Cash 5,000,000


12/31/27 360,000 0.71 255,600 5,000,000
12/31/28 360,000 0.65 234,000 12/31/23 Accrued Interest Receivable 400,000
12/31/29 4,360,000 0.60 2,616,000 Interest Income 400,000
Total Present Value of Loan 3,382,800
Jan.1 2024 Cash 1,400,000
Carrying Amount of Loan 4,000,000 Accrued Interest receivable 400,000
Present Value of Loan -3,382,800 L/R 1,000,000
Impairment Loss 617,200 12/31/24 Accrued Interest Receivable 400,000
Interest Income 400,000
12/31/23 Cash 360,000
Interest Income 360,000 Jan.1 2025 Cash 1,400,000
Accrued Interest receivable 400,000
Loan Impairment Loss 617,200 L/R 1,000,000
Allowance for Loan Impairment 617,200 12/31/25 Loan Impairment Loss 210,000
Allowance for Loan Impairment 210,000
12/31/24 Allowance for Loan Impairment 304,452
Interest Income (3,382,800 x 9%) 304,452 Jan.1 2026 Cash 1,000,000
L/R 1,000,000
12/31/25 Allowance for Loan Impairment 312,748 12/31/26 Allowance for Loan Impairment 143,200
Interest Income (617,200 - 304,452) 312,748 Interest Income (1,790,000 x 8%) 143,200

12/31/26 Cash 360,000 Jan.1 2027 Cash 1,000,000


Interset Income 360,000 L/R 1,000,000
*same entry for Dec.31, 2027 and 2028 12/31/27 Allowance for Loan Impairment 66,800
Interest Income (210,000 - 143,200) 66,800
12/31/29 Cash 4,360,000
Interset Income 360,000 Jan.1 2028 Cash 1,000,000
L/R 4,000,000 L/R 1,000,000
#7-7 Jan1 2023 L/R 3,000,000 12/31/25 Cash (3M x 9%) 270,000
Cash 3,000,000 Interset Income 270,000

12/31/23 Cash (3M x 9%) 270,000 Impairment Loss 1,559,400


Interset Income 270,000 Allowance for loan impairment 1,559,400

Impairment Loss 24,900 Allowance for loan impairment 1,800,000


Allowance for loan impairment 24,900 L/R 1,800,000

Expectected cash flow- 12/31/23 2,700,000 Expectected cash flow- 12/31/25 1,200,000
Multiply by PV of 1 at 9% for 5 years 0.65 Multiply by PV of 1 at 9% for 3 years 0.77
Present value of cash flow- 12/31/23 1,755,000 Present value of expected cash flow- 12/31/25 924,000

Carrying Amount- 12/31/23 3,000,000 Carrying Amount- 12/31/24 3,000,000


Present value of cash flow- 12/31/23 1,755,000 Present value of cash flow- 12/31/24 924,000
Expected credit loss 1,245,000 Lifetime expected credit loss 2,076,000
Multiply by probability of default within 12 mos 2% Unadjusted allowance -516,600
12-month expected credit loss 24,900 Impairment loss 1,559,400

Loan Receivable 3,000,000 Loan Receivable (3M - 1.8M) 1,200,000


Allowance for loan impairment -24,900 Allow. for loan impairment (2,076,000 - 1.8M) -276,000
Carrying Amount- 12/31/23 2,975,100 Net carrying amount- 12/31/25 924,000

12/31/24 Cash (3M x 9%) 270,000 Carrying amount- 12/31/25 924,000


Interset Income 270,000 Interest Income for 2026 (924,000 x 9%) 83,160
Carrying amount- 12/31/26 1,007,160
Impairment Loss 491,700 Interest Income for 2027 (1,007,160 x 9%) 90,644
Allowance for loan impairment 491,700 Carrying amount- 12/31/27 1,097,804
Interest Income for 2028 (simply the difference) 102,196
Expectected cash flow- 12/31/24 1,800,000 Carrying amount- 12/31/28 1,200,000
Multiply by PV of 1 at 9% for 4 years 0.71
Present value of expected cash flow- 12/31/24 1,278,000 12/31/26 Allowance for loan impairment 83,160
Interest Income 83,160
Carrying Amount- 12/31/24 3,000,000 12/31/27 Allowance for loan impairment 90,644
Present value of expected cash flow- 12/31/24 1,278,000 Interest Income 90,644
Expected credit loss 1,722,000 12/31/28 Allowance for loan impairment 102,196
Multiply by probability of default within 4 years 30% Interest Income 102,196
Lifetime expected credit loss allowance 516,600
Unadjusted allowance -24,900 Cash 1,200,000
Impairment loss 491,700 L/R 1,200,000
#7-8 Jan1 2023 L/R 6,000,000 #7-9 INTEREST INTEREST DISCOUNT CARRYING
Cash 6,000,000 DATE RECEIVED INCOME AMORTIZATION AMOUNT
Jan1 2023 4,760,000
Impairment Loss (2.5M x 2%) 50,000 12/31/23 500,000 571,200 71,200 4,831,200
Allowance for loan impairment 50,000 12/31/24 500,000 579,744 79,744 4,910,944
12/31/25 500,000 410,944 89,056 5,000,000
12/31/23 Cash (6M x 10%) 600,000
Interset Income 600,000 #7-10 INTEREST INTEREST PREMIUM CARRYING
DATE RECEIVED INCOME AMORTIZATION AMOUNT
Impairment Loss (2.1M x 15%) 265,000 Jan1 2023 5,375,000
Allowance for loan impairment 265,000 12/31/23 600,000 537,500 62,500 5,312,500
12/31/24 600,000 531,250 68,750 5,243,750
Expected lifetime credit loss (2.1 x 15%) 315,000 12/31/25 600,000 524,375 75,625 5,168,125
Allowance for loan impairment- Jan1 2023 -50,000 12/31/26 600,000 516,813 83,188 5,084,938
Additional impairment loss for 2023 265,000 12/31/27 600,000 515,063 84,938 5,000,000

12/31/24 Cash (6M x 10%) 600,000 Jan1 2023 L/R 5,000,000


Interset Income 600,000 Cash 5,000,000

Allowance for loan impairment 300,000 Direct Origination Cost 375,000


Gain on reversal of impairment 300,000 Cash 375,000

Twelve-month expected credit loss (1.5M x 1%) 15,000 Administrative Expense 50,000
Allowance for loan impairment- 12/31/23 315,000 Cash 50,000
Gain on reversal of impairment 300,000
12/31/23 Cash 600,000
12/31/25 Acrrued Interest Receivable 600,000 Interest Income 600,000
Interest Income 600,000
Interest Income 62,500
Cash 5,400,000 Direct Origination Cost 62,500
Allowance for loan impairment 15,000
Loss from default 1,185,000 #7-11 Loan Receivable 1,500,000
L/R 6,000,000 Direct Origanation Cost 40,000
Accrued Interest Receivable 600,000 Total 1,540,000
Orgination fee received from borrower (1.5M x 4%) -60,000
Carrying Amount of Loan Receivable 1,480,000

Loan Payable 1,500,000


Origination fee charged by bank -60,000
Carrying Amount of Loan Payable 1,440,000
#7-12 Interest Income for 2023 1,940,000 x 13.45 x 1/12 21,663 #7-15 Gikapoy nako, next time na ni.
Accrued Int. Receivable 2,000,000 x 12% x 1/12 20,000

#7-13 Present Value of Cash Flows


12/31/25 1,500,000 0.89 1,335,000
12/31/26 2,000,000 0.80 1,600,000
12/31/27 2,500,000 0.71 1,775,000
12/31/28 3,000,000 0.64 1,920,000
Total Present Value of Cash Flows 6,630,000

Carrying Amount of Loan 10,080,000


Present Value of Cash Flows 6,630,000
Impairment Loss 3,450,000

Interest Income for 2025 6,630,000 x 12% 795,600

Loan Receivable (9M - 1.5M) 7,500,000


Allowance for Loan Impairment ((3.45M - 1.08M) - 795,600) 1,574,400
Carrying Amount- 12/31/25 5,925,600

#7-14 PV of Principal 5,000,000 x 0.75 3,750,000


PV of Interest 200,000 x 2.49 498,000
Total Present Value 4,248,000
Carrying Amount 5,000,000
Impairment loss for 2023 752,000

Impairment loss 752,000


Allowance for loan impairment 752,000

Interest Income for 2024 4,248,000 x 10% 424,800


Interest Received 5,000,000 x 4% 200,000
Amortization of allowance for loan impairment 224,800

Cash 200,000
Allowance for loan impairment 224,800
Interest Income 424,800

Loan Receivable 5,000,000


Allowance for Loan Impairment (752,000 - 224,800) 527,200
Carrying Amount- 12/31/25 4,472,800

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