Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Chapter 11, Problem 63.4C
To determine
The contrast between net income and net cash flow. Net income is the incomes perceived in an announcing period, less the costs perceived in a similar period.
Net cash flow is determined by deciding changes in closure cash adjusts from period to period, and isn’t affected by the accrual basis of bookkeeping.
To discuss:
Does the bank use net income in this way rather than simply predicting future cash flow by reference to past
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Cozy Bank loaned a borrower P7,500,000 on January 1, 2018.
Problem 7-6 (IAA)
The terms of the loan were payment in full on
2023, plus annual interest payment at 12%.
January 1,
The interest payment was made as scheduled on
2019. However, due to financial setbacks, the borrower w
unable to make the 2020 interest payment.
January 1,
The bank considered the loan impaired and projected the
cash flows from the loan on December 31, 2020.
The bank accrued the interest on December 31, 2019, but dia
not continue to accrue interest for 2020 due to th
impairment of the loan.
Projected cash flows
Amount projected
on December 31, 2020
Date of cash flow
December 31, 2021
December 31, 2022
December 31, 2023
December 31, 2024
500,000
1,000,000
2,000,000
4,000,000
Present value of 1 at 12%
For one period
For two periods
For three periods
For four periods
0.89
0.80
0.71
0.64
Required:
1. Compute the present value of the loan receivable on
December 31, 2020.
2. Compute the impairment loss on the loan…
CPA Bank Co. loaned P6,750,000 to a borrower on January 1, 2018. The terms of
the loan were payment in full on January 1, 2023 plus annual interest payment at
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due to financial setbacks, the borrower was unable to make the 2020 interest
payment. The bank considered the loan impaired and projected the cash flows
from the loan on December 31, 2020. The bank has accrued the interest on
December 31, 2019, but did not continue to accrue interest for 2020 due to the
impairment of the loan. The projected cash flows are: December 31, 2021,
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(b) Assuming that both Botosan Company and National Organization Bank use the effective-interest method to amortize the discount, prepare the amortization schedule for the note.(c) Under what circumstances can National Organization Bank consider Botosan’s note to be impaired?(d) Compute the loss National Organization Bank will suffer…
Chapter 11 Solutions
Cornerstones of Financial Accounting
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Ch. 11 - Prob. 11DQCh. 11 - Prob. 12DQCh. 11 - What does an increase in inventory imply? How...Ch. 11 - Prob. 14DQCh. 11 - Prob. 15DQCh. 11 - Prob. 16DQCh. 11 - Prob. 17DQCh. 11 - What balance sheet account changes might you...Ch. 11 - Prob. 19DQCh. 11 - Prob. 20DQCh. 11 - Prob. 21DQCh. 11 - Prob. 22DQCh. 11 - Prob. 23DQCh. 11 - Prob. 24DQCh. 11 - Which of the following is not a use of the...Ch. 11 - Which of the following would be classified as a...Ch. 11 - Prob. 3MCQCh. 11 - Which of the following is an example of a cash...Ch. 11 - Prob. 5MCQCh. 11 - Which of the following statements is true? a. Net...Ch. 11 - Mullinix Inc. reported the following information:...Ch. 11 - Which item is added to net income when computing...Ch. 11 - Refer to the information for Cornett Company...Ch. 11 - Prob. 10MCQCh. 11 - Chasse Building Supply Inc. reported net cash...Ch. 11 - Smoltz Company reported the following information...Ch. 11 - Prob. 13MCQCh. 11 - Classification of Cash Flows Stanfield Inc....Ch. 11 - Classification of Cash Flows Patel Company...Ch. 11 - Prob. 16CECh. 11 - Analyzing Changes in Balance Sheet Accounts Refer...Ch. 11 - Prob. 18CECh. 11 - Prob. 19CECh. 11 - Determining Net Cash Flow from Investing...Ch. 11 - Prob. 21CECh. 11 - Prob. 22CECh. 11 - Cash Receipts from Customers Singleton Inc. had...Ch. 11 - Prob. 24CECh. 11 - Prob. 25CECh. 11 - Prob. 26BECh. 11 - Prob. 27BECh. 11 - Analyzing Balance Sheet Accounts A review of the...Ch. 11 - Prob. 29BECh. 11 - Prob. 30BECh. 11 - Prob. 31BECh. 11 - Prob. 32BECh. 11 - Prob. 33BECh. 11 - Classification of Cash Flows A review of the...Ch. 11 - Classification of Cash Flows The following are...Ch. 11 - Analyzing Changes in Balance Sheet Accounts A...Ch. 11 - Analyzing the Accounts Casey Company uses a...Ch. 11 - Analyzing the Accounts The controller for Summit...Ch. 11 - Reporting Net Cash Flow from Operating Activities...Ch. 11 - Prob. 40ECh. 11 - Determining Cash Flows from Investing Activities...Ch. 11 - Determining Cash Flows 1from Investing Activities...Ch. 11 - Determining Cash Flows from Financing Activities...Ch. 11 - Prob. 44ECh. 11 - Partial Statement of Cash Flows Service Company...Ch. 11 - Prob. 46ECh. 11 - Prob. 47ECh. 11 - Preparing Net Cash Flows from Operating...Ch. 11 - Preparing a Statement of Cash Flows-Direct Method...Ch. 11 - Preparing a Statement of Cash Flows-Direct Method...Ch. 11 - Prob. 51ECh. 11 - Prob. 52PSACh. 11 - Prob. 53PSACh. 11 - Classification of Cash Flows Rolling Meadows...Ch. 11 - Prob. 55PSACh. 11 - Preparing a Statement of Cash Flows Monon Cable...Ch. 11 - Prob. 57PSACh. 11 - Preparing Net Cash Flows from Operating...Ch. 11 - Using a Spreadsheet to Prepare a Statement of Cash...Ch. 11 - Prob. 52PSBCh. 11 - Prob. 53PSBCh. 11 - Prob. 54PSBCh. 11 - Preparing a Statement of Cash Flows Volusia...Ch. 11 - Prob. 56PSBCh. 11 - Prob. 57PSBCh. 11 - Prob. 58PSBCh. 11 - Using a Spreadsheet to Prepare a Statement of Cash...Ch. 11 - Prob. 60.1CCh. 11 - Prob. 60.2CCh. 11 - Prob. 60.3CCh. 11 - Prob. 61.1CCh. 11 - Profitability Declines and the Statement of Cash...Ch. 11 - Prob. 61.3CCh. 11 - Prob. 61.4CCh. 11 - Prob. 62.1CCh. 11 - Prob. 62.2CCh. 11 - Prob. 62.3CCh. 11 - Income, Cash Flow, and Future Losses On January L...Ch. 11 - Income, Cash Flow, and Future Losses On January L...Ch. 11 - Income, Cash Flow, and Future Losses On January L...Ch. 11 - Prob. 63.4CCh. 11 - Researching Accounting Standards: Dissenting Views...Ch. 11 - Prob. 64.2CCh. 11 - Prob. 65.1CCh. 11 - Prob. 65.2CCh. 11 - Prob. 65.3CCh. 11 - Prob. 65.4CCh. 11 - Prob. 65.5CCh. 11 - Prob. 65.6CCh. 11 - Prob. 65.7CCh. 11 - Prob. 65.8CCh. 11 - Prob. 66.1CCh. 11 - Prob. 66.2CCh. 11 - Prob. 66.3CCh. 11 - Prob. 66.4CCh. 11 - Comparative Analysis: Under Armour, Inc., versus...Ch. 11 - Prob. 67.1CCh. 11 - CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT The...
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