Assets Liabilities + Net Worth Required R$ 1000.00 Demand Deposits 4,000 Excess Reserves: 2,000.00 Savings Accounts: 4,000.00 Loans: 6,000.00 Owner's Equity $1, 000.00

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 18MCQ
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please explain this multi part T account problem

Assets
Liabilities + Net Worth
Required R $ 1000.00
Demand Deposits 4,000
Excess Reserves: 2,000.00
Savings Accounts: 4,000.00
Loans: 6,000.00
Owner's Equity $1, 000.00
A. Using the Taccount above, determine what is the reserve ratio?
B. How much can be loaned out currently?
C. If George withdraws 2000.00 from his checking account, how is the required reserves affected?
After George's withdraw, what amount can the bank safely loan out in new loans?
D. If Sally deposits 1,000. 00, in her savings accounts, how is required reserves changed?
How much does excess reserves change?
E. If George repays 1,000.00 loan, how much does required reserves change by?
How much does excess change by?
Transcribed Image Text:Assets Liabilities + Net Worth Required R $ 1000.00 Demand Deposits 4,000 Excess Reserves: 2,000.00 Savings Accounts: 4,000.00 Loans: 6,000.00 Owner's Equity $1, 000.00 A. Using the Taccount above, determine what is the reserve ratio? B. How much can be loaned out currently? C. If George withdraws 2000.00 from his checking account, how is the required reserves affected? After George's withdraw, what amount can the bank safely loan out in new loans? D. If Sally deposits 1,000. 00, in her savings accounts, how is required reserves changed? How much does excess reserves change? E. If George repays 1,000.00 loan, how much does required reserves change by? How much does excess change by?
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