Copy of SOL. MAN. Chapter 6 Receivables - Addtl Concepts IA PART 1A 2020 Edition PDF

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Chapter 6Receivables – Additional ConceptsPROBLEM 1: TRUE OR FALSE1. TRUE2. TRUE – Direct origination costs increase the carrying amount of a financial asset. Therefore, direct origination costs decrease the effective interest rate. This is based on the concept that the effective interest rate and t...

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Page|1

Chapter 6 Receivables – Additional Concepts PROBLEM 1: TRUE OR FALSE 1. TRUE 2. TRUE–Di r e c tor i gi na t i onc os t si nc r e as et hec a r r yi ngamount ofafinanc i alas s e t . The r e f or e , di r e c tor i gi na t i onc os t sde c r e as e t hee ffe c t i vei nt e r e s tr a t e . Thi si sba s e dont hec onc e ptt ha tt he e ffe c t i vei nt e r e s tr a t eandt hepr e s e ntva l ueamountha vean i nve r s er e l a t i ons hi p. 3. TRUE 4. F ALSE 5. F ALSE–or i gi nale ffe c t i vei nt e r e s tr a t e 6. TRUE 7. F ALSE 8. TRUE 9. TRUE 10.TRUE

PROBLEM 2: MULTIPLE CHOICE – THEORY 1. B 2. B 3. B 4. D 5. C 6. A 7. C 8. C 9. B 10.D 11.A 12.A 13.B 14.C 15.A

Page|2 PROBLEM 3: EXERCISES 1. So l ut i o n: Pr i nc i pala mount Di r e c tor i gi na t i onc os t Or i gi na t i onf e e( ₱2, 0 0 0, 0 00x6 %) I ni t i a lc a r r y i nga mo unto fl o a n

2, 0 0 0, 0 00 24 , 0 00 ( 120 , 0 00) 1, 9 0 4, 0 00

 Us i ng“ t r i a lande r r or , ”e ffe c t i vei nt er e s tr a t ei sappr oxi ma t e l y 12%. Dat e

Col l e c t i ons ofi nt e r e s t s

I nt e r e s t i nc ome

Amor t i z at i o n

Pr e s e nt val ue 1 , 9 04 , 00 0

J a n.1 ,20 x 1 De c .31 ,2 0 x 1

2 0 0, 00 0

2 2 8 , 48 0

2 8 , 48 0

1 , 9 32, 4 80

De c .31 ,2 0 x 2 De c .31 ,2 0 x 3

2 0 0, 00 0 2 0 0, 00 0

2 3 1 , 89 8 2 3 5 , 72 5

3 1 , 89 8 3 5 , 72 5

1 , 9 64 , 37 8 2 , 0 00 , 10 3

2. So l ut i o ns : J ul y1, 20x1 J ul y1, 2 0x 1 J ul y1, 2 0x 1

Loa nr e c e i va bl e Ca s h I mpa i r me ntl os s * Los sa l l o wa nc e *Equa lt o1 2mont he x pe c t e dc r e di tl os s e s

2 , 4 00 , 00 0 2 , 4 00 , 00 0 2 4 , 0 00 2 4 , 0 00

De c e mbe r31, 20x1 I mpa i r me ntl os s Los sa l l o wa nc e( 1 09 . 2 K* *–2 4K) * *Li f e t i mee xpe c t e dc r e di tl os s e s De c .3 1, 2 0x 1

8 5 , 2 00 8 5 , 2 00

De c .3 1, 2 0x 1

1 4 4 , 00 0 I nt e r e s tr e c e i va bl e 1 4 4 , 00 0 I nt e r e s ti nc ome ( 2. 4M x1 2% x6 /1 2) * * * * * *I nt e r e s tr e ve nuei sc omput e dont hegr os sc ar r yi nga mountbe c a us et he l oani snotc r e di t i mpai r e d( i . e . ,St a ge2r a t he rt ha nSt a ge3 ) .

De c e mbe r31, 20x2 De c .3 1, 2 0x 1

Los sa l l owa nc e( 1 0 9 . 2 K–6 K* * * * ) I mpa i r me ntga i n

1 0 3 , 20 0 1 0 3 , 20 0

* * * * 12mont he xpe c t e dc r e di tl os s e s–Mor ni ngCo.r e ve r t sbac kt o me as ur i nge xpe c t e dc r e di tl os s e se qualt o12mo nt he xpe c t e dc r e di t l o s s e sbe c aus et hec r e di tr i s khass i gni fic ant l yde c r e as e ds i nc e

Page|3 i ni t i a lr ec ogni t i on. Thi si se vi de nc e dbyt hef ac tt ha tt he12mont h e xpe c t e dc r e di tl os s e sof₱6, 0 00on12/31/20x2a r el owe rt ha nt he 12 mont he xpe c t e dc r e di tl os sof₱24, 000on7/1/20x1. De c .3 1, 2 0x 1

I nt e r e s tr e c e i va bl e I nt e r e s ti nc ome ( 2. 4M x1 2% x6 /1 2)

1 4 4 , 00 0 1 4 4 , 00 0

3. So l ut i o ns : Re qui r e me nt( a) : Thepr e s e ntval ueofe s t i ma t e df ut ur ec as hflo wsi sc omput e das f ol l ows : Es t i ma t e df ut ur ec as hflows ( 2M ÷2e qua la nnua li ns t a l l me nt s ) 1, 0 00 , 0 00 Mul t i pl i e db y:PVofor di nar ya nnui t ya t1 0%, n=2 1 . 7 355 372 Pr e s e ntval ueofe s t i ma t e df ut ur ec as hflows 1 , 73 5, 5 37 Thec ar r yi nga mounti sc omput e da sf ol l ows : Pr i nc i pala mount I nt e r e s tr e c e i va bl e( a c c r ue di nt e r e s ti n2 0x2) Car r yi nga mountofl oanb e f o r ei mpai r me nt Pr e s e ntval ueofe s t i ma t e df ut ur ec as hflows ( r e c ove r abl ea mount ) Car r yi nga mountofl oanb e f o r ei mpai r me nt I mpai r me ntl os s

2, 0 00, 000 20 0, 0 00 2, 2 00, 000 1 , 7 35, 5 3 7 (2 , 2 0 0, 0 00) ( 464 , 4 63)

Thei mpai r me ntl os si sr e c or de da sf ol l ows : Di r e c t De c . I mpai r me ntl os s 3 1 , I nt e r e s tr e c e i va bl e 2 0 x3 Loanr e c e i vabl e

4 64, 4 6 3

Al l owanc e De c . I mpai r me ntl os s 3 1 , I nt e r e s tr e c e i vabl e

4 64, 4 6 3

2 0 x3

Al l owa nc ef ori mpa i r me ntl os s

2 00, 0 0 0 2 64, 4 6 3

2 00, 0 0 0 2 64, 4 6 3

Page|4 Re qui r e me nt( b) : Dat e

Col l e c t i ons

I nt e r e s t i nc ome

Amor t i z at i o n

Pr e s e nt val ue

De c .3 1, 2 0x 3 De c .3 1, 2 0x 4 De c .3 1, 2 0x 5

1, 000 , 00 0 1, 000 , 00 0

1 73, 5 5 4 90, 909

8 26, 4 4 6 9 09, 0 9 1

1 , 7 35 , 53 7 9 09, 0 91 -

4. So l ut i o ns : Re qui r e me nt( a) : Da t e Cas h Los sont r ans f er Loansr e c e i vabl e Re qui r e me nt( b) : Da t e Ca s h Li abi l i t yonr e pur c ha s e a gr e e me nt Re qui r e me nt( c ) : Da t e Ca s h Los sont r ans f e r Loansr e c e i vabl e( 200K–20K) Li a bi l i t yonr e pur c ha s e a gr e e me nt

1 80, 00 0 20, 000 2 00, 00 0

1 80, 00 0 1 80, 00 0

1 80, 00 0 20, 000 1 80, 00 0 20, 000

PROBLEM 4: MULTIPLE CHOICE – COMPUTATIONAL 1. DSo l ut i o n: Mar t i nBank, t hel e nde r : Pr i nc i pa lamount 15 0, 0 00 Di r e c tl oanor i gi na t i onc os t s 4, 000 Or i gi na t i onf e e( 1 50Kx4%) ( 6, 0 00) Car r yi ngamount 148, 000 Duff, t hebor r owe r : Pr i nc i pa lamount Or i gi na t i onf e e( 1 50Kx4%) Car r yi ngamount

15 0, 0 00 ( 6, 0 00) 144, 000

Page|5 2. C( 194, 0 00x12. 4% x1/12)=2, 0 05 3. B So l ut i o n: J a n. L oa nr e c e i vabl e 1 , Unr e al i z e dl os s–“ Da y1” 2 0x 1 di ffe r e nc e Cas h ( 1 ) Une a r ne di nt e r e s t

5 00, 0 0 0 1 82, 2 4 0 5 00, 0 0 0 1 82, 2 4 0

( 1 )

Fut ur ec as hflow Mul t i pl yb yPVof₱1@12%, n=4 Pr e s e ntva l ueo fl o a nr e c e i v a b l e

5 00, 0 0 0 0 . 6 355 2 3 17, 7 6 0

Fa c ea mount Pr e s e ntval ueofl oanr e c e i vabl e Une ar ne di nt e r e s ti nc ome

5 0 0, 0 00 ( 317 , 7 60) 182 , 2 40

 Thene te ffe c ti nt he20x1pr ofiti sde t e r mi ne dasf ol l ows : I nt e r e s ti nc ome( 31 7, 7 60x1 2 %) 38 , 1 31 Unr e al i z e dl os s-" Da y1"di ffe r e nc e ( 182 , 2 40) Ne tde c r e as ei npr ofit ( 14 4, 1 09)

4. A( 8, 200, 00 0–6 23, 2 46)x10% =757, 6 75 5. DSo l ut i o n: PVoff ut ur ec as hflows( 1. 4 M xPVa nn.due@1 2%, n=3 ) 3 , 7 66, 0 71 Car r yi nga mount ( 5 , 60 0, 0 00 ) I mpai r me ntl os s ( 1 , 83 3, 9 29 )

Dat e De c .3 1, 2 0x 1 J a n. 1, 20 x2 J a n. 1, 20 x3 J a n. 1, 20 x4

Col l e c t i on Amor t i z at i o s I nt e r e s ti nc ome n Pr e s e ntval ue

1 , 4 00, 0 00 1 , 4 00, 0 00 1 , 4 00, 0 00

0 2 83, 929 1 50, 000

1 , 4 00, 0 00 1, 116 , 07 1 1 , 2 50, 0 00

3, 7 66 , 0 71 2 , 3 66, 0 7 1 1, 2 50 , 0 00 -

Page|6

6. CSo l ut i o n:  Thei mpa i r me ntl os si sc omput e dasf ol l ows : ( a ) PVofr e mai ni ngc as hflo ws 3 , 5 68 , 7 8 5 ( b) Le s s : Car r yi nga mount ( 4, 0 6 8, 5 01) I mpai r me ntl os s ( 4 99, 716 ) ( a )

ThePVoft her e mai ni ngc as hflowsi sc omput e dasf ol l ows : Cas h PVof1 PV Pr e s e nt Dat e flows @11% f ac t or s val ue 1 /1 /x3 1, 0 0 0, 0 00 n=0 1 1 , 0 00, 0 00 0 . 9 009 0090 1 /1 /x4 1, 5 0 0, 0 00 n=1 1 1 , 3 51, 3 51 0 . 8 116 2243 1 /1 /x5 1, 5 0 0, 0 00 n=2 3 1 , 2 17, 4 34 3 , 5 68, 7 85 ( b)

Thec ar r yi ngamountoft hel oani sc omput e dasf ol l ows : I ni t i a lme a s ur e me nt : Fa c ea mount 4 , 0 00, 0 00 Di r e c tor i gi na t i onc os t s 3 64, 0 9 8 Or i gi na t i onf e e s ( 2 40, 0 00 ) I ni t i alc a r r yi nga mount 4 , 1 24, 0 98 Sub s e q ue ntme a s ur e me nt : Col l e c t i on I nt e r e s t Dat e s i nc ome

Amor t i zat i o n

1 / 1/ x 1 1 2/ 3 1/ x1 1 2/ 3 1/ x2

4 80, 000 4 80, 000

453, 651 4 50, 7 5 2

2 6, 3 49 29, 2 4 8

Pr e s e nt val ue 4, 1 24, 098 4 , 09 7, 7 49 4, 0 68, 501

 Thei nt e r e s ti nc omei n20x2i sc omput e dasf ol l ows : ( 3, 5 6 8, 7 85–1 , 0 00 , 0 00)x1 1 % =28 2, 5 66

7. ABi gc o,I nc .hasnots ur r e nde r e dc ont r olove ranyamountof t het r ans f e r r e dr e c e i vabl e sbe c aus ei ti sobl i g at e dt o r e pur c has et he m. 8. D

Page|7 Si nc et het r ans f eroft hebondi sus e donl yass e c ur i t yf ort hel oan, andnotasas al eoft hebond,Da yc owoul dnotr e c ogni z et hebond i ni t sbooksa tt het i meoft het r ans f e r . Thebondwoul dbe r e c ogni z e di nDa yc o' sbooksont heda t eRa yc ode f aul t e d. The bondi sme as ur eda tf ai rva l ue . 9. C So l ut i o n: Ye ar 1 2 3

Expe c t e df e e s 40, 000 30, 000 10, 000 80, 000

Fr ac t i ons 4 0/80 3 0/80 1 0/80

60, 000s e r vi c i nga s s e tx40/80f r ac t i oni nYe ar1=30, 0 00 amor t i zat i on 10.C–( 75 0, 000x. 02=15, 000s e r vi c ef e e )+( 750, 000x. 12x51/36 5 =12 , 575i nt e r e s te xpe ns e )=t ot alof27, 575

11.C Ma t ur i t yval ue=500, 000+( 500, 0 00x8%)=5 40, 000 Di s c ount=54 0, 00 0x10% x6/12=27 , 000 Ne tpr oc e e ds=540, 000–27, 000=513, 000

12.A Ma t ur i t yval ue[ 1 M +( 1 M x12 % x90 /3 65 ) ]

1 , 0 29, 5 89

Pr ot e s tf e e

1 , 0 00

Amountt r ans f e r r e dt oac c ount sr e c e i vabl e

1 , 0 30, 5 89

PROBLEM 5: FOR CLASSROOM DISCUSSION 1. So l ut i o n:

Page|8 I ni t i a lme a s ur e me nt : F ac ea mount Di r e c tl oa nor i gi na t i onc os t s Or i gi na t i onf e e s( 5M x2 %) Car r yi ngamount-1/ 1/ x1

5 , 0 00 , 0 00 261 , 9 86 ( 10 0, 0 00) 5 , 1 61, 9 86

Sub s e q ue ntme a s ur e me nt : Fut ur ec as hflowsxPVf ac t or@x% =Pr es entval ueofnot e Fi r s tt r i a l( us i ng9%) :  Pr i nc i pa lof( 5, 000, 0 00xPVof1@9%, n=4)+I nt e r e s tof ( 5 00, 000xPVofor di na r ya nnui t y@9%,n=4)=5, 1 61, 986  ( 5, 000, 000x0. 7084 252110 5)+( 500, 000x3. 23 971987 722)= 5, 161, 986  ( 3, 542, 126+ 1 , 6 19, 860)=5, 161, 9 86i se qualt o5, 161, 9 86  Thee ffe c t i vei nt e r e s tr a t ei s9%.

Dat e 1 / 1 / x 1 1 2 / 3 1 / x 1 1 2 / 3 1 / x 2 1 2 / 3 1 / x 3 1 2 / 3 1 / x 4

Col l e c t i on s

I nt e r e s t i nc ome

Amor t i zat i o n

Pr e s e nt val ue

5 , 16 1, 9 86 5 00, 0 0 0

4 6 4, 5 79

35, 4 2 1

5, 1 26 , 56 5

5 00, 0 0 0

4 6 1, 3 91

38, 6 0 9

5, 0 87 , 95 6

5 00, 0 0 0

4 5 7, 9 16

42, 0 8 4

5, 0 45 , 87 2

5 00, 0 0 0

4 5 4, 1 28

45, 8 7 2

5, 0 00 , 00 0

2. So l ut i o n: I ni t i a lme a s ur e me nt :2M xPVof1@10%, n=4=1, 3 66, 02 7 J a n. 1, 2 0x 1

Loanr e c e i va bl e Unr e al i z e dl os s( “Da y1”di ffe r e nc e ) Cas h Une ar ne di nt e r e s t

3. So l ut i o ns :

2 , 0 00, 0 00 6 33, 9 7 3 2 , 0 00, 0 00 6 33, 9 7 3

Page|9

J ul y1 ,2 0x 1 J ul y1, 2 0x 1 J ul y1, 2 0x 1

Loa nr e c e i va bl e Cas h I mpa i r me ntl os s * Los sa l l o wa nc e

2 , 0 00 , 00 0 2 , 0 00 , 00 0 2 0 , 0 00 2 0 , 0 00

*Equa lt o1 2mont he x pe c t e dc r e di tl os s e s( 2 . 5 % x8 0 0 , 0 0 0 ) De c e mbe r3 1, 2 0x 1 De c .3 1, 2 0x 1

I mpa i r me ntl os s Los sa l l o wa nc e( 9 1K–2 0 K)

7 1 , 0 00 7 1 , 0 00

Li f e t i mee xpe c t e dc r e di tl os s e s=( 3 . 0 % +1 0 %)x7 00 , 0 0 0=9 1 , 00 0 De c .3 1, 2 0x 1

I nt e r e s tr e c e i va bl e I nt e r e s ti nc ome( 2M x10 %x

1 0 0 , 00 0 1 0 0 , 00 0

6 /12 ) * *

* *I nt e r e s tr e ve nuei sc omput e dont hegr os sc ar r yi nga mountbe c a us et he l oani snotc r e di t i mpai r e d( i . e . ,St a ge2r a t he rt ha nSt a ge3 ) . De c e mbe r3 1, 2 0x 2 De c .3 1, 2 0x 2

Los sa l l owa nc e( 9 1 K–5 K) I mpa i r me ntga i n

8 6 , 0 00 8 6 , 0 00

1 2 mont he xpe c t e dc r e di tl os s e s=( 1 % x5 0 0 , 00 0 )=5 , 0 0 0

SunnyDa yCor p. r e ve r t sba c kt ome as ur i nge xpe c t e dc r e di tl os s e s e qualt o12mo nt he xpe c t e dc r e di tl o s s e sbe c aus et hec r e di tr i s kha s s i gni fic ant l yde c r e as e ds i nc ei ni t i alr e c ogni t i on.Thi si se vi de nc e d byt hef ac tt ha tt he12mont hde f aul tr i s kof1% on1 2/31/20x2i s l owe rt ha nt he1 2mont hde f aul tr i s kof2. 5% on7/1/20x1 De c .3 1, 2 0x 2

I nt e r e s tr e c e i va bl e I nt e r e s ti nc ome( 2M x1 0% x

1 0 0 , 00 0 1 0 0 , 00 0

6 /12 )

4. So l ut i o n: PVoff ut ur ec as hflows( 1M xPVor d. a nn.@1 0%, n=3 )

2 , 4 86, 8 52

Page|1 0 Car r yi nga mount( 3M pr i nc i pal+. 4M i nt . r e c e i vabl e ) I mpai r me ntl os s Di r e c t

( 3 , 40 0, 0 00 ) ( 9 13, 1 48 )

Al l owanc e

De c .3 1, 20 x1

De c .3 1, 20 x1

I mpa i r me ntl os s 9 1 3, 14 8 I nt e r e s tr e c e i va bl e 4 0 0, 00 0 Loanr e c e i vabl e 5 1 3, 14 8

I mpa i r me ntl os s 9 1 3 , 1 4 8 I nt e r e s tr e c e i va bl e 4 00 , 00 0 Los sal l owanc e 5 13 , 1 4 8

Dat e De c .3 1, 2 0x 1 De c .3 1, 2 0x 2 De c .3 1, 2 0x 3 De c .3 1, 2 0x 4

Col l e c t i on Amor t i z at i o s I nt e r e s ti nc ome n Pr e s e ntval ue

2, 4 86 , 8 52 1, 0 00 , 0 00

24 8, 6 85

7 51, 3 15

1 , 7 35, 5 3 7

1, 0 00 , 0 00

173 , 5 54

8 26, 4 4 6

909 , 0 91

1, 0 00 , 0 00

9 0 , 9 09

9 09, 0 9 1

5. So l ut i o n: No v . Ca s h 1 4, Li abi l i t yonr e pur c has ea gr e e me nt 2 0x 1

-

2 8, 0 00 2 8, 0 00

Thet r ans f e rdoe snotqual i f yf order e c ogni t i onbe c aus e At he naCo.i sr e q ui r e dt or e pur c h a s et het r ans f e r r e dl oan.Thec as h r e c e i ve dont het r ans f e ri sr e c or de dasl i abi l i t y . 6. Ans we r :₱20 0, 000–t hegr os sa mount . Offs e t t i ngi snot appl i c abl ebe c aus eABCCo. doe snoti nt e ndt os e t t l et he ac c ount sr e c e i vabl eandac c ount spa yabl es i mul t ane ous l y .A financ i a las s e tandafina nc i a ll i a bi l i t yar eoffs e tandonl yt he ne tamounti spr e s e nt e di nt hes t a t e me ntoffinanc i alpos i t i on i ft hee nt i t yhasbot h: a . al e g a lr i g hto fs e t o ff;and b. ani nt e nt i o nt os e t t l et heamount sonane tbas i sor s i mul t ane ous l y 7. So l ut i o n:

Page|1 1 Cas h Di s c ountonl oanpa ya bl e LoansPa yabl e

7 23, 0 0 0 2 7, 0 00 750 , 0 00

8. So l ut i o ns : o ur na le nt r i e s  J Not i fic at i onbas i s 1 . T or e c or dt heas s i gnme nt Ac c t s .r e c e i vabl e–a s s i gne d9 0 0 K Ac c ount sr e c e i vabl e 9 0 0K 2 .

Ac c t s .r e c e i va bl e–a s s i gne d9 0 0K Ac c ount sr e c e i va bl e 9 0 0K

Tor e c or dt her e c e i ptofl oan

Ca s h 7 2 3 K Di s c ountonL/P( 900M x3%) 2 7K Loa npa ya bl e 7 5 0K 3 .

Nonnot i fic at i onbas i s

Ca s h 7 23 K Di s c ountonL/P( 9 00M x3%) 2 7 K Loa npa ya bl e 7 5 0K

Tor e c or dt hec ol l e c t i ons Noe nt r yy e t

4 . T or e c or dt hewr i t e off Al l owanc ef orba dde bt s 5 30 Ac c t s .r e c e i va bl e–as s i gne d 5 3 0

Ca s h 3 5 0 K S al e sr e t ur ns 5 60 Ac c t s . r e c ’ bl e–as s i gne d 35 0 , 5 6 0 Al l owanc ef orbadde bt s 5 30 Ac c t s . r e c e i vabl e–a s s i gne d 5 3 0

5 . Tor e c or dt her e mi t t anc eofc ol l e c t i onst oSunda y , pl usi nt e r e s t No ta p pl i c a b l e( s e e# ’ s6&7b e l o w)

Loa npa ya bl e I nt e r e s te xpe ns e(a) Cas h

3 5 0K 7 . 5 K 3 57 . 5 K

6 . S unda yFi na nc i ng Cor p.not i fie sMor ni ngCo.oft hec ol l e c t i ons Loa npa yabl e 3 50 K Sa l e sr e t ur ns 5 6 0 Ac c t s . r e c ’ bl e–a s s i gne d 3 5 0, 56 0 7 . Mor ni ngCo. pa yst hei nt e r e s t I nt e r e s te xpe ns e(a) 7. 5K Cas h 7 . 5 K ( a )

( 7 50 Kx1 2% x1 /12 )=7. 5K

 Eq ui t yi na s s i gne dr e c e i va b l e s A/ R–a s s i g ne d

Lo a np a y a b l e

Page|1 2 be g . 9 0 0, 00 0

7 5 0 , 00 0 be g . 3 5 0 , 56 0 53 0

c ol l e c t i on pa yme nt 3 5 0 , 00 0 wr i t e off

5 4 8, 91 0

e nd.

e nd. 4 0 0, 00 0

A/R-a s s i gne d( 900 K3 51, 0 9 0)

54 8, 9 10

Loanpa ya bl e( 750 K-35 0K) Equi t yi nas s i g ne dr e c e i vabl e s

( 400, 000 ) 1 4 8, 9 10

9. So l ut i o ns : Re qui r e me nt( a) : MugCo. ’ sbooks : Cas h( s q ue e z e ) 3 68 , 0 00 Duef r om Fa c t or( 2% ×₱40 0, 0 00 ) 8, 0 00 Los sonSa l eofRe c e i vabl e s( 6% ×₱40 0, 0 00 ) 2 4, 0 00 Ac c ount sRe c e i vabl e

Coffe eCo. ’ sbooks: Ac c ount sRe c e i va bl e Duet oMug Fi nanc i ngRe ve nue Cas h

4 00, 0 0 0

400 , 0 00 8, 0 00 24 , 00 0 368 , 00 0

Re qui r e me nt( b) : MugCo. ’ sbooks : Cas h Duef r om Fa c t or Se r vi c ec har ge( 6 % ×₱400 , 0 00) Los sonr e c our s eobl i ga t i on Ac c ount sRe c e i vabl e Re c our s eLi abi l i t y

3 68 , 0 00 8 , 0 00 24, 0 0 0 7 , 0 00 4 00, 0 0 0 7, 0 00

Page|1 3

10.So l ut i o n: Ma t ur i t yval ue=Pr i nc i pa l+I nt e r e s tf ort hef ul lt e r m oft henot e Ma t ur i t yval ue=1, 000, 000+( 1, 000, 000x1 2% x6 /1 2) Ma t ur i t yval ue=1, 060, 000 Di s c ountpe r i od=une xpi r e dt e r m( o rf ul lt e r m –e xpi r e dt e r m) Di s c ountpe r i od=6mont hs–4mont hsf r om J ul y1t oNov .1 Di s c ountpe r i od=2mo nt hs Di s c ount=Ma t ur i t yval uexDi s c ountr a t exDi s c ountpe r i od Di s c ount=1, 060, 0 00x16% x2/12 Di s c ount=28, 267 Ne tpr oc e e ds=Ma t ur i t yval ue-Di s c ount Ne tpr oc e e ds=1, 060, 0 00–2 8, 2 67 Ne tpr oc e e ds=1, 0 31, 73 3 I nt e r e s ti nc ome=ac c r ue di nt e r e s ta sofda t eofdi s c ount i ng I nt e r e s ti nc ome=1, 000, 0 00x12% x4/12 I nt e r e s ti nc ome=40, 000 Re qui r e me nt( a) :Wi t houtr e c our s ebas i s No v . Ca s h( e qualt one tpr oc e e ds ) 1, Lo s sondi s c ount i ng( s que e ze ) 20x Not er e c e i vabl e 1 I nt e r e s ti nc ome

1 , 0 31, 7 33 8 , 2 67 1 , 0 00, 0 00 4 0, 0 00

Re qui r e me nt( b) : Wi t hr e c our s ebas i s–Condi t i onals al e No v . Ca 1 , 0 31, 7 33 s h( e qualt one tpr oc e e ds ) 1, Lo 8 , 2 67 s sondi s c ount i ng( s que e ze ) 20x 1 , 0 00, 0 00 Not er e c e i vabl edi s c ount e d 1 I nt e r e s ti nc ome 4 0, 0 00 Re qui r e me nt( c ) :Wi t hr e c our s ebas i s–Se c ur e dbor r owi ng No v . Ca s h( e qualt one tpr oc e e ds ) 1 , 0 31, 7 33 1, Lo s sondi s c ount i ng( s que e ze ) 8 , 2 67 20x L i a b i l i t y o n n o t e d i s c o u n t e d 1 , 0 00, 0 00 1 I nt e r e s ti nc ome 4 0, 0 00...