A. P73,438The total loss allowance to be recognized at December 31, 20x20 isB. P74,188C. P74,938D. P75,688 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 lbans on December 31, 2020 follows:CurrentMore than 30 days past dueMore than 60 days past dueMore than 90 days past dueTotalP1,400,00075,000100,000125,000P1,700,000• 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:AmountP200,000Status PV of Expected Future Cash FlowsP180,000LoanPast Due90 daysCurrent12150,00050,000Not calculated360 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

Answered: = all loans over 90 days vith…

Business

Accounting

= all loans over 90 days vith recovering the associate

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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