LOAN-IN-PROCESS ACCOUNT (LIP ACCOUNT) serves as a deposit account for construction funds. The buyers down payment is deposited into this account and is used for the initial construction draws. Disbursements of actual loan funds begin once the buyers money is depleted. Interest on the borrowed funds will be billed monthly on the amount withdrawn. Upon completion of the house, the buyer will be asked to furnish a homeowners insurance policy and monies for completing the escrow account. Once final disbursements to the builder are made, monthly payments begin based on amortization of the balance at that time.
SYD see SUM-OF-THE-YEARS-DIGITS.
TOTAL CASH FLOW FROM FINANCING accounts for inflows and outflows of cash resulting from debt issuance and financing, the issuance of any new stock, dividend payments, and any repurchase of existing stock.
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