Problem 15On December 31, 2017, Entity Z acquired Lumangyao Corporation's P1,000,000 notes forP927,880. The market interest rate at that time was 12%. The stated interest rate was 10%,payable annually. The notes mature in five years and classified as financial asset at amortizedcost. At December 31, 2019, the note is considered credit impaired. Entity Z determined that itwas probable that the issuer would pay back only P600,000 of the principal at maturity. AtDecember 31, 2020, because of the improvement in the credit rating of Lumangyao, Entity Zreassessed the collectibility of the note and now expects to collect P900,000 from Lumangyaoat maturity date.18. The required loss allowance at Dec. 31, 2019 is

The impairment loss is the value carrying amount of financial assets over the net fair value of the…

Answered: 18. The required loss allowance at Dec.…

Business

Accounting

18. The required loss allowance at Dec. 31, 2019 is

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: At December 31, 2020, Crane Corporation owes $ 514,900 on a note payable due February 15, 2021. (a)

A: A current liability is a debt that must be paid up either this year or next year, whichever comes…

Q: Refer to Revenue Procedure 2015-13, Section 7: Terms and conditions of change on page 44. Read…

A: 1. As per the Revenue Procedure 2015-13, Section 7, the adjustment period for a favorable is 1…

Q: On September 1, 2018, Hazel Company offered special termination benefits which consisted of lump sum…

A: Balance sheet shows: Assets accounts Liabilities accounts Shareholder's equity accounts

Q: Bramble Industries Ltd. acquired two copyrights during 2020. One copyright was on a textbook that…

A: Internally generated intangible assets are not capitalised as it is difficult to establish their…

Q: Receive payment within the discount period, July 10, 2020?

A: Solution.. Receiving Payment within a discount period results in Increase of one asset account…

Q: Thirteenth month pay is exempt from income taxation? Group of answer choices No, only the excess to…

A: Solution: As per Philipines tax laws, "The 13th month pay is exempt from tax, up to a limit of P…

Q: On April 1, 2020 Smith Jr. paid P43,800 for a one-year advance rent. a. Using the Asset Method,…

A: The asset method records the advance expenses as a current asset (prepaid expense). The prepaid…

Q: As of January 2023, what is the current Federal Minimum Wage be and what is the FL minimum wage?…

A: Variables in the question:As of January 2023 current Federal Minimum Wage FL minimum wage

Q: Bonus depreciation in 2019 generally permits taxpayers to deduct 100% of the cost of the asset in…

A: Tax Cuts and Jobs Act (TCJA 2017) have decreased the corporate income tax. TCJA is a Congressional…

Q: special orders for machinery constructed to the customer specifications. Information are as follows:…

A: Solution: current liability for advances from customers on December 31, 2019 = Customer Advances -…

Q: Regarding Rodney’ s Registered Retirement Savings Plan situation, assume that the following data is…

A: Within Canada, the registered retirement savings plan, often known as a pension saving plan seems to…

Q: Student loans insured or guaranteed by the United States that are discharged after December 31,…

A: As per the Covid-19 relief bill, No tax will be charged on forgiven student loan for the period…

Q: A court case decided on December 2020 awarded damages against Poll Corp. The judge has announced…

A: As per the principal of conservatism, an entity should account for maximum losses and expenditure.

Q: What are the tax ramifications if section 179 is used to depreciate the total amount of an asset…

A: Introduction Section 179 allows immediate expense deduction businesses for purchase of depreciable…

Q: NEED HELP ON PART B PLEASE For 2021, Sherri has a short-term loss of $2,250 and a long-term loss…

A: The gain or loss from the sale of a qualifying investment that has been owned for more than 12…

Q: a. Using the Asset Method, give the Journal Entry on September 1, 2020 and the Adjusting Journal…

A: The prepaid expenses are the expenses that are paid in advance by the business. The prepaid expenses…

Q: (c) The annual insurance premium for Claire's business premiséš (COvering th 2018 to 31 August 2019)…

A: Given that: Annual insurance premium for the period Sep 1,2018 to March 31,2019 = $7200

Q: pay initially to the insurance company? monthly insurance? repaid insurance of Vincent on December…

A: Vincent Fabron paid insurance coverage for 5years ie 60 months in March 2020 Unadjusted prepaid…

Q: Since the SUTA rates changes are made at the end of each year, the available 2019 rates were used…

Q: Which of the following business expenses is/are subject to a 50% deduction limit for 2020? I.…

A: Business expenses are the costs of carrying on a trade or business, and they are usually deductible…

Q: How will this transaction be classified?

A: Given information is: During year 13, Quo determined that an insurance premium paid and entirely…

Q: All approved Refundo NOW Advances will be paid from the Federal and/or State refund proceeds…

A: "All approved Refundo NOW Advances will be paid from the taxpayers Federal and/or State refund…

Q: On May 1, 2021, FDNACCT Co. received one-year rent in advance of P150,000 from one tenant. At the…

A: Rent is earned for the year ended December 31, 2021 is the amount of rent received for this period

Q: When / what date is the fiscal year if the ending is March 31,2020?

A: Fiscal year refers to the year or period which is for a period of 12 months, which could be July 1 -…

Q: Habek Hardware Inc. provides a product warranty for defects on two major lines of items sold since…

A: Warranty: Warranty expense is the amount that a company needs to pay to the customers in case the…

Q: For 2020, Sweet Inc. computed its annual postretirement expense as $234,100. Sweet’s contribution to…

A: Post-retirement benefit expense is the cost of pension recognized for the period. When determining…

Q: For 2020, Sarasota inc. computed its annual postretirement expense as $ 237,200. Sarasota's…

A: Post-retirement benefit expense is the cost of pension recognized for the period. When determining…

Q: A is indebted to B and B is also indebted to A. A's debt is due on April 23, 2023 while B's debt is…

A: When two people owe each other money, the debts were set off, and both person's obligations are…

Q: For 2020, Sampsell Inc. computed its annual postretirement expense as $240,900. Sampsell's…

A: Journal entry: A journal entry is a systematic record of a financial transaction recorded in…

Q: Which one of the following amounts represents the maximum amount that you may deduct for moving…

A: Moving expenses: These are the expenses associated related to your moving your household’s goods and…

Q: Melinda received sick pay from an employer-paid insurance policy in 2020. The sick pay will be…

A: It is the amount paid to employee for the period when he is not available for work because of…

Q: #20 Chryzza company carried a provision of P4,000,000 in its draft financial statements for the year…

A: GIVEN: In the given case Chryzza company is carrying provision pf P4,000,000 in draft financial…

Q: 11. An entity received a seven year zero interest bearing note on February 1, 2019 in exchange for a…

A: Interest on the note prevailing on just December 31 will be considered as the interest rate for…

Q: True or False. As per TRAIN Law, the excess de minimis benefits received may be added as part of…

A: SOLUTION EXPLANATION - SUBJECT TO THE RULE ON P90000 AMOUNT ON 13TH MONTH PAY AND OTHER BENEFITS…

Q: For depreciable personal property placed in service in 2018, the mid quarter convention applies if…

A: It is not more than 25%, it is more than 40% of all depreciable personal property is placed in…

Q: On April 1, 2024, Kingbird Industries receives its annual property tax bill in the amount of $8,720…

A: Journal Entries - Journal Entries are recorded for the expense incurred during the financial year.…

Q: At December 31, 2020, Carla Corporation owes $506,600 on a note payable due February 15, 2021. (a)…

A: ANSWER Amount of note payable due on February 15,2021 = $506,600 a) Defer payment of note until…

Q: Explain the purpose and use of Form W 4 from 2020 or later

A: The internal revenue service (IRS) Form W-4 is a tax document that employees use to inform their…

Q: What is the Gross Minimum Wage amount determined as TL for the first half of 2021? A) 2324 TL B)…

A: The gross minimum wage amount determined as TL for the first half of 2021 is 3577 TL.

Q: At the beginning of 2021, an entity purchased a fire insurance policy covering a property for a…

A: PREPAID EXPENSES Prepaid expenses are future expenses that are paid in advance, such as rent or…

Q: rs' Plan, individuals are not permitted to deduct RRSP contributions that are made and immediately…

A: The House Buyers' Plan (HBP) is a scheme that allows you to use funds from your Retirement Pension…

Q: On July 1, 2019, a taxpayer enters into a 36-month lease. The terms of the lease require the…

A: The deduction for the expenses incurred on assets would only be provided for the portion of usage…

Q: 17- A RO 40000 Interest-bearing note payable is signed on December 26 2020. If the note is a 120-day…

A: Short term Liabilities - If the liability is maturing within a year will be consider as short term…

Q: During 2019, P determined that insurance premiums of $12289 for the 3-year period beginning January…

A: Given, Insurance premiums paid for 3 years=$12,289Income tax rate=37%

Q: Gallagher Company has gathered the information needed to complete its Form 941 for the quarter ended…

A: Form 941, also known as the Employer's Quarterly Federal Tax Return, is a form that employers use to…

Q: c. How would your answer change if Blue Corporation incurred the expenses in 2022 and 2023 (rather…

A: AMORTIZATION EXPENSES Amortization is an accounting method for spreading out the costs for the use…

Concept explainers

Tax Deferred Retirement Benefits

It stands for Simplified Employee Pension Individual Retirement Account. This savings plan is for self-employed persons such as independent contractors, freelancers, entrepreneurs, etc. The tax rules of SEP IRA are the same as traditional IRA. Entrepreneurs can also open SEP IRA accounts for their employees and gain a tax advantage. The employees cannot make contributions to these accounts by themselves however they will be taxed upon withdrawal.

Question

100%

Problem 15
On December 31, 2017, Entity Z acquired Lumangyao Corporation's P1,000,000 notes for
P927,880. The market interest rate at that time was 12%. The stated interest rate was 10%,
payable annually. The notes mature in five years and classified as financial asset at amortized
cost. At December 31, 2019, the note is considered credit impaired. Entity Z determined that it
was probable that the issuer would pay back only P600,000 of the principal at maturity. At
December 31, 2020, because of the improvement in the credit rating of Lumangyao, Entity Z
reassessed the collectibility of the note and now expects to collect P900,000 from Lumangyao
at maturity date.
18. The required loss allowance at Dec. 31, 2019 is

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which is not part of de minimis benefits. a) 13th month pay b) Uniform allowance c) Rice allowance d) Monetized unused vacation leave credtis
Question 12: Employees are required to contribute toward the purchase of disability insurance in all 50 states. Answer: А. O True В. O False
Please help me with all answers thanku
A 12-month policy is written on April 1, 2021, for a premium of $1,200. As of December 31, 2021, what are the following amounts for this policy: Written Premium (calendar year 2021) Earned Premium (calendar year 2022) In-force premium (as of 12/31/2021)
December 31, 2020 December 31, 2019 Contributions due in less than one year $2,293,775 $2,305,753 Contributions due in one to five years 5,454,320 6,272,198 Contributions due in more than five years 1,098,384 1,696,768 Total Contribution $8,846,479 $10,274,719 Less Allowance for bad debts 166,972 398,723 Discount to net present value 497,812 710,124 Net Contribution $ 8,181,695 $ 9,165,872 Without Donor's Restrictions With Donor's Restrictions 2020 2019 2020 2019 Contributions due in less than one year $2,293,775 $2,305,753 Contributions due in one to five years 5,454,320 6,272,198 Contributions due in more than five years $1,098,384 $1,696,768 The discount rates used on long-term promises to give were 3 percent in 2020 and 2019. Suppose that the foundation was to prepare the statement of financial position in columnar form, one column for net assets without donor restrictions, and another for net assets with donor restrictions. In which column would these receivables be reported?…
Regarding Rodney' s Registered Retirement Savings Plan situation, assume that the following data is accurate: - His earned income in 2019 was $100,000, and $150,000 in 2020 - His Pension Adjustment based on 2019 data was $8,000, and based on 2020 data, it was $9,000. - Unused RRSP deduction limit room at the end of 2019 was $3,000. - He had undeducted RRSP contributions balance of $3,275 at the end of 2019. - He contributed $13,000 to his RRSP in 2020. Required: 1. What is the RRSP contribution room limit for 2020 2. What is the maximum RRSP tax deduction that can be claimed for 2020 3. What is the unused RRSP Contribution Room available at the end of 2020 4. Determine any undeducted contributions remaining at the end of 2020; and 5. Determine whether at the end of 2020, there are any excess RRSP contributions, on which penalties will apply
On September 1, 2020, Mr. Chu paid P62,940 worth of insurance premium for two years.a. Using the Asset Method, give the Journal Entry on September 1, 2020 and the Adjusting Journal Entry on December 31, 2020.b. Using the Expense Method, give the Journal Entry on September 1, 2020 and the Adjusting Journal Entry on December 31, 2020.
Layla received a 2019 Form 1099-MI SC with an entry of $2.200 in box 7 inon employee compensation). Layta had helpeda trend ty ding so ocial mediantng Hon stout he go his income? Report the income on Schedule 1 (Form 1040) on line B as other income Report the income on Schedule t (Form 1040) on line 8 as other income ahd deduct the expenses as an adustment to mcome Complete a Schedule C (Fom 1040) and include any related expenses, such as her expenses for purchasing as Request that Layla's triend reptace the Form 1009-MISC with a Form W-2 000
D is obliged to give C P50,000.00 with interest at 12% per annum on December 31, 2020 pursuant to a contract of loan. Question: What are the requisites of obligation? Discuss and apply your answers to the problem given above.
jordan has $13,000 in ending RRSP contribution room at the end of 2019. He earnedsalary of $60,000 in 2019 and his employer advises that his pension adjustment in2019 was $3,000. Calculate what jordan has for an RRSP contribution room at thebeginning of 2020
7. A corporation reporting on a fiscal year ending every March 31 shall file its 2019 income tax return not later than * a. April 15, 2019 O b. July 15, 2020 O c. April 15, 2020 O d. June 15, 2020
On 1 November 2020, James was eligible to receive the following three annuities.(a) $2000 per annum payable on 1 February each year, with the FInal payment to be made on 1 February 2042;(b) $3200 per annum payable quarterly on 1 January, 1 April, 1 July and 1 October each year, with the FInal payment to be made on 1 January 2037;(c) $1800 per annum payable monthly on the FIrst day of each month, with the FInal payment to be made on 1 August 2039. Immediately after receiving the monthly payment due on 1 November 2020, James asked that these three annuities be combined into a single annuity payable half-yearly on 1 February and 1 August in each sub- sequent year with the FInal payment to be made on 1 February 2042. Find the amount of the revised annuity, given it was calculated assuming an interest rate of 8% per annum effective. Assume all months are of equal length.