choose the best answer

Question 11

On June 1, 2020, SATELLA FINANCIAL loaned SUBARU Corporation P30,000,000 on a 12% note, payable in five annual installments of 6,000,000 beginning January 2, 2021. In connection with this loan, SUBARU Corporation was required to deposit P300,000 in a zero-interest-bearing escrow account. The amount held in escrow is to be returned to SUBARU after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, 2020. SUBARU made timely payments through November 1, 2020. On January 2, 2021, SATELLA FINANCIAL received payment of the first principal installment plus all interest due. At December 31, 2020, SATELLA FINANCIAL's interest receivable on the loan to SUBARU should be

Group of answer choices

a.300,000

b.0

c.900,000

d.600,000

Question 12

On January 2, 2020, Star Company originates a 10-year, 7%, 4,000,000 loan, The loan carries an annual interest rate of 7% and is repayable at par at the end of 10th year (i.e. December 31, 2029). Star Company charges a 1.25% non-refundable loan origination fee to the borrower and also incurs 100,000 in direct origination costs. The contract specifies that the borrower has an option to pre-pay the instrument at approximately equal to instrument's amortized cost at each exercise date, and that no penalty will be charged for pre-payment. But at the inception of the loan agreement, Star expects the borrower not to prepay, the amortization period is equal to the instrument's full term and for that reason the effective yield rate is at 6.823%. With this, what is the amortized cost of the loan receivable of Star on December 31, 2021?

Group of answer choices

a.4,050,000

b.4,042,413

c.4,046,331

d.4,038,288

CHROLLO Corp.

CHROLLO Corp., a large scale bookstore company, is having a "hyped-up", first year operations since its incorporation in the Philippines.The first year was 2019. The stores and branches as of the end of its first year reaches to about 100 stores nationwide. This is mainly due to the introduction of credit sales in the bookstore industry. This results to a bulk of receivables for CHROLLO. As it keeps its optimism before the start of second year of operations, CHROLLO is hopeful that the profitability will continuously grow. However during the first quarter of 2020, COVID-19 pandemic affected its operations on a wide-scale basis. This resulted to put CHROLLO in a difficult financial situation at the start of the third quarter of 2020. To survive the pandemic, the corporation decided to finance the bulk of its accounts receivable to obtain cash for continuation of operations amidst COVID-19.On June 30, 2020, CHROLLO sold accounts receivable amounting 1,500,000 for immediate cash of 1,400,000 to a universal bank. It was noted that no allowance for doubtful accounts was related to these accounts. Subsequently on December 15, 2020, CHROLLO assigned the remaining balance of the accounts receivable which is 5,000,000 as of that date, as collateral on a recently agreed loan from another universal bank. The loan payable amounted to 2,500,000 with 12% interest to be paid annually , and consequently CHROLLO immediately received 2,500,000still exclusive of a 2% bank charge based on the amount of the loan.

As of December 31, 2020, CHROLLO disclosed to you the following balances in its books:

• Allowance for doubtful accounts just before any adjustments amounting to 100,000
• Accounts receivable, excluding any factored and assigned accounts amounting to 1,000,000
• Assigned accounts receivable amounting to 5,000,000
• Factored accounts receivable amounting to 1,500,000

As of December 31, 2020, no collections were made on the assigned accounts. Further, CHROLLO reasonably estimated that 10% of the total accounts receivable might be uncollectible.CHROLLO wanted to seek for your professional service in determining the impact of the financing of receivables in the corporation.

Question 28

CHROLLO Corp.

Question1: What is the total amount of cash received from financing of the accounts receivable will you disclose to CHROLLOas of the end of 2020?

Group of answer choices

a.3,850,000

b.4,000,000

c.4,050,000

d.some other answer

e.3,950,000

CHROLLO Corp.

Question 2: What is the net realizable value of CHROLLO's accounts receivable as of December 31, 2020?

Group of answer choices

a.5,400,000

b.some other answer

c.4,500,000

d.6,000,000

e5,000,000

Question 30

CHROLLO Corp.

Question 3: What amount should be recognized by CHROLLO as its doubtful accounts to be presented in the income statement for the year-ended December 31, 2020?

Group of answer choices

a.500,000

b.600,000

c.0

d.650,000

e.some other answer