The North-South Bank had the following balances of loans and receivables:

Receivable from customers:

Corporate Lending P 200,782,934

Consumer Lending 123,829,111

Residential Mortgages 245,167,289

Small Business Lending 90,728,371

Total P 660,507,705

Allowance for credit losses (31,892,735)

Net realizable value P 628,614,970

The following summary represents the result of inquiry and analysis of the loans and receivable:

Corporate Lending

North-South Bank assessed that P52,678,241 has objective evidence of non-compliance with

payment terms as part of the contract between the bank and the corporations. These companies already communicated to North-South Bank to restructure the loans. Most of the companies are asking for 20% reduction in principal balance and a 1% effective reduction in interest for the remaining 15 years. North-South Bank's discount rate is 4%.

Consumer Lending

North-South Bank credit department assessed that about 25% of the total loans are

underperforming with an average of 10 years to collect. North-South Bank's discount rate is 4%.

Residential Mortgages

The residential mortgages are collectible in average of 15 years. Of which, 30% of the entire balance were approved within the first quarter of the year. The bank's policy for residential loans based on its previous assessment states that the default is expected at 5% for the next 12-months. Based on prior experience using the average of 15 years lifetime for loans, about 10% of the total loans are defaulted. The remaining 70% is classified in the underperforming assets, of which 15% is the average expected uncollectible. North-South Bank's discount rate is 4%.

Small Business Lending

Of the total balance, the banks assessment is summarized as follows:

Classification % of total Default in 10 years Default in 12 months

Performing 70% 10% 5%

Underperforming 20% 30% 40%

Not performing 10% 50% 70%

North-South Bank's discount rate is 4%.

Questions:

1. How much is the amount of impairment loss that North-South Bank in its statement of

comprehensive income for the current year?

2. What is the amount of allowance for credit losses should North-South Bank disclosed in its notes to financial statements for the current year?

3. What is the amount of loans and receivables should North-South Bank reported in its

Statement of financial position?

4. What is your proposed adjusting journal entry related to its loans and receivables and expected credit losses?