Himalayan Bank Limited (HBL) has Rs 500 million in the reserve for loan loss account on its balance sheet. The bank management has decided that the minimum adequate reserve is Rs 475 million. Assume…

Himalayan Bank Limited (HBL) has Rs 500 million in the reserve for loan loss account on its balance sheet. The bank management has decided that the minimum adequate reserve is Rs 475 million. Assume that Rs 50 million of loans are uncollectible and bank management charges off these loans. a. How much the bank management should increase the accrued expenses item, provision for loan losses to replenish the reserve? b. Suppose that the bank management charges off Rs 100 million and recovers Rs 50 million. What will be the amount of net charge-off? c. What will be the provision for loan losses for the current year if bank maintains the minimum adequate reserve for loan losses assuming that amount of gross charge-off is Rs 100 million and recovery amount is Rs 50 million? d. What will be the reserves for loan losses?