Use the Following to Answer Questions

question 46

Essay

Use the following to answer questions
The following note disclosure is taken from the 2016 annual report to shareholders of Winchester International Corporation.
NOTE 5: ALLOWANCE FOR LOAN LOSSES
The allowance for loan loss is maintained at a level to absorb probable losses inherent in the loan portfolio.This allowance is increased by provisions charged to operating expense and by recoveries on loans previously charged off,and reduced by charge-offs on loans.
The following is a summary of the changes in the allowances for loan losses for three years:
Winchester also reported (in thousands)in its comparative balance sheet that it held Loans receivable,net,of $6,869,911 and $6,819,209 at December 31,2016,and December 31,2015,respectively.
-Using a T-account for the Allowance for Loan Losses,identify the changes in the account during 2016.

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Definitions:

Historical Cost

The original monetary value of an asset, without adjustments for inflation, depreciation, or other factors since acquisition.

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, where the borrower commits to paying back the principal along with interest on a specified schedule.

Amortized Cost

Amortized cost is an investment's acquisition cost adjusted for amortization, impairment charges, and any accumulated payment or receipts since acquisition.

Market Value

The market's current rate for buying or selling an asset or service.