rovident Manufacturing recently began paying all of its invoices within 20 days of receipt, rather than its usual 30 days. How would this adjustment likely affect Provident’s chances of receiving a ba
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Provident Manufacturing recently began paying all of its invoices within 20 days of receipt, rather than its usual 30 days. How would this adjustment likely affect Provident’s chances of receiving a bank loan in the near future?
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- On April 2, 2020, shortly after the $7.5 million deposit outflow, Key Bank had borrowed the needed fund in the fed funds market to cover the shortfall in reserves for the remainder of the month (29 days, from 4/2 to 4/30). The required yield on a discount basis was 1.5%. On April 30, 2020, Key Bank finally received the first required payments from its mortgages, loan, and T-bills, and it also paid off its fed funds loan. Key Bank was required to establish a loan loss reserve at 0.5% of the commercial loan value and the bank was in the 35% tax bracket. The bank had not engaged in any off-balance- sheet activities. Question: What was the value of bank's risk-weighted assets (RWA) for its first month of operation? O $155,932,756.48 O $160,773,451.60 O $175,402.215.43 O $130,426,340.40On June 12, 2022, FDNACCT Services issued a 90-day, 12%, P430,000 note for money borrowed which was used to purchase several computers. FDNACCT honored the note on maturity date. How much was the total cash paid to settle the note?On December 31, 2020, JKL Bank granted a P5,000,000 loan to a borrower with 10% stated rate payable annually and maturing in 5 years. The loan was discounted at the market interest rate of 12%. Unfortunately, the financial condition of the borrower worsened because of lower revenue. On December 31 ,2022, the bank determined that the borrower would pay back only P3,000,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid on the P5,000,000 loan. The present value of 1 at 12% is 0.57 for five periods and 0.71 for three periods. In addition, the present value of an ordinary annuity of 1 at 12% is 3.60 for five periods and 2.40 for three periods. Compute for the carrying amount of the loan receivable on December 31, 2022.
- On December 31, 2020, Stellar Company signed a $ 1,022,000 note to Pearl Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Stellar’s financial situation worsened. On December 31, 2022, Pearl Bank determined that it was probable that the company would pay back only $ 613,200 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $ 1,022,000 loan.On December 31, 2021, London Bank granted a P5,000,000 loan to a borrower with 10% stated rate payable annually and maturing in 5 years. The loan was discounted at the market interest rate of 12%. Unfortunately, the financial condition of the borrower worsened because of lower revenue. On December 31, 2023, the bank determined that the borrower would pay back only P3,000,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid on the P5,000,000 loan. The present value of 1 at 12% is .57 for five periods and .71 for three periods. The present value of an ordinary annuity of 1 at 12% is 3.60 for five periods and 2.40 for three periods. What is the impairment loss to be recognized on December 31, 2023? a. 2,000,000 O b. 1,442,960 O c. 1,922,960 O d. 1,670,000Jem Riane Delos Reyes Bank granted a loan of P3,000,000 to a borrower on January 1, 2021. The terms of the loan were payment in full on December 31, 2026 plus annual interest payment at 8% every December 31. The first interest payment was made on December 31, 2021. However, on December 31, 2021, due to financial difficulties, the borrower informed Freetown Bank that it would probably miss the interest payments for the next two years. After that, the borrower expects to resume the annual interest payment but the principal would be paid on December 31, 2027 or one year late with interest paid for that additional year. Accordingly, the payments from the borrower are scheduled as follows: Date of Flow Cash Flow Amount 12/31/2022 No interest payment Nil 12/31/2023 No interest payment Nil 12/31/2024 Interest payment 12/31/2025 Interest payment 12/31/2026 Interest payment 12/31/2027 Interest payment P 240,000 240,000 240,000 240,000 3,000,000 Principal payment 34. The carrying amount of the…
- The Electric Car Corporation borrowed $3,000,000 from the Bank of Walnut Creek on October 1, 2021. The loan was from an SBA (Small Business Administration) program that required interest only payments annually at the low rate of 1.75%. At the end of 5 years, on October 1, 2026 the entire loan of $3,000,000 must be repaid. In the event it is not repaid, the interest rate of 1.75% will be increased retroactively at a rate of 7.5%. In order to assure that the loan can be repaid on October 1, 2026, the Chief Financial Officer wants to set up a special fund to contribute to each and every year in order to have sufficient funds to repay the loan in full on October 1, 2026. The Investment firm of J. Edward and Associates of Emeryville, California has an investment fund available that has an annual fixed return of 5%. The Electric Car Corporation wants to start making an annual deposit to the fund beginning in one year starting on October 1, 2022, and for each of the next three years of…What is he initial carrying value of the loans receivable as of Dec 31, 2019?On December 31, 2020, JKL Bank granted a P5,000,000 loan to a borrower with 10% stated rate payable annually and maturing in 5 years. The loan was discounted at the market interest rate of 12%. Unfortunately, the financial condition of the borrower worsened because of lower revenue. On December 31 ,2022, the bank determined that the borrower would pay back only P3,000,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid on the P5,000,000 loan. The present value of 1 at 12% is 0.57 for five periods and 0.71 for three periods. In addition, the present value of an ordinary annuity of 1 at 12% is 3.60 for five periods and 2.40 for three periods. Compute for the impairment loss on loan receivable to be recognized in 2022?
- What is the forecasted current portion of bank loan on comfy homes 2018 pro forma financial statements. The $45000 current portion of the bank loan will be paid in December 31, 2018. Of the $255000 in long term debt, another $45000 comes due on December 31, 2019. Comfy home does not plan to obtain any additional loans in 2018. The interest rate for comfy homes borrowing has declined to 6%. It is expected to be the average rate of interest for comfy home short and long term borrowings in 2018. Revenues believe to increase 30% in 2018.744. Uno Bank reports a loan receivable from Davao Air in the amount of P50 million on January 1, 2016. Since the pandemic greatly affected the airline industry, Davao Air is currently facing financial difficulties. The initial loan’s repayment terms include 10% interest rate on outstanding balance plus annual principal payment of P10 million on December 31 of each year, starting on December 31, 2016. Davao Air has made timely payments of the loan and interest until December 31, 2019. In 2020, the Covid-19 pandemic hit the country and greatly affected the airline industry and since then, Davao Air is experiencing financial difficulties. Because of the financial distress being suffered by Davao Air, on December 31, 2020, Uno Bank concluded that the principal and interest currently due can be collected in the next three years but it is probable that no further interest can be collected. The probable amounts and timing of collections are determined as follows: P3M at Dec. 31, 2021P4M…
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