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How much is the maximum amount of loan that ABC Co. can get from the bank?

How much is the maximum amount of loan that ABC Co. can get from the bank?

FINANCIAL ACCOUNTING
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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How much is the maximum amount of loan that ABC Co. can get from the bank? (Round up answer to the nearest thousand pesos.)

On January 1, 2021, ABC Co. is valuing its equity to acquire additional financing from the bank. It gathered the following current values. Current assets P2,000,000 Noncurrent Land ??? Building Equipment 3,000,000 7,000,000 4,000,000 Long term investments Current Liabilities 1,500,000 Noncurrent Liabilities 8,500,000 The Land account includes 3 separate lots with details below: Original Purchase Price Increase Annual Land Acquisition Date Jan. 1, 2010 A P2,100,000 1,620,000 1,800,000 10% В Dec. 31, 2013 Jan. 1, 2015 8% C 9% Based on current values, ABC Co. is required to have maximum of 50% debt ratio upon the approval of the bank loan.
Transcribed Image Text:On January 1, 2021, ABC Co. is valuing its equity to acquire additional financing from the bank. It gathered the following current values. Current assets P2,000,000 Noncurrent Land ??? Building Equipment 3,000,000 7,000,000 4,000,000 Long term investments Current Liabilities 1,500,000 Noncurrent Liabilities 8,500,000 The Land account includes 3 separate lots with details below: Original Purchase Price Increase Annual Land Acquisition Date Jan. 1, 2010 A P2,100,000 1,620,000 1,800,000 10% В Dec. 31, 2013 Jan. 1, 2015 8% C 9% Based on current values, ABC Co. is required to have maximum of 50% debt ratio upon the approval of the bank loan.
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