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Assuming an economy have only two commercial banks in it banking system, Classic Bank and Prudent Bank. The following shows the balance sheet of the two banks as at 2019. Classic Bank Balance sheet as at December, 2019 GHSm GHSm Assets: Liabilities & Equity: Reserves 1,000 Deposits 3,000 Securities 2,000 Equity 7,000 Loans & Advances 1,000 Property, Plant and Equipment 6,000 . 10,000 10,000 Prudent Bank Balance sheet as at December, 2019 GHSm GHSm Assets: Liabilities & Equity: Reserves 600 Deposits 2,500 Securities 1,500 Equity 4,400 Loans & Advances 800 Property, Plant and Equipment 4,000 . 6,900 6,900 Assume a required reserve ratio of 10%. What is the amount of excess reserves in this commercial banking system?

Assuming an economy have only two commercial banks in it banking system, Classic Bank and Prudent Bank. The following shows the balance sheet of the two banks as at 2019. Classic Bank Balance sheet as at December, 2019 GHSm GHSm Assets: Liabilities & Equity: Reserves 1,000 Deposits 3,000 Securities 2,000 Equity 7,000 Loans & Advances 1,000 Property, Plant and Equipment 6,000 . 10,000 10,000 Prudent Bank Balance sheet as at December, 2019 GHSm GHSm Assets: Liabilities & Equity: Reserves 600 Deposits 2,500 Securities 1,500 Equity 4,400 Loans & Advances 800 Property, Plant and Equipment 4,000 . 6,900 6,900 Assume a required reserve ratio of 10%. What is the amount of excess reserves in this commercial banking system?

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 89E: Ratio Analysis Rising Stars Academy provided the following information on its 2019 balance sheet and...
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Assuming an economy have only two commercial banks in it banking system,
Classic Bank and Prudent Bank. The following shows the balance sheet of the two
banks as at 2019.
Classic Bank
Balance sheet as at December, 2019
GHSm GHSm
Assets: Liabilities & Equity:
Reserves 1,000 Deposits 3,000
Securities 2,000 Equity 7,000
Loans & Advances 1,000
Property, Plant and Equipment 6,000 .
10,000 10,000
Prudent Bank
Balance sheet as at December, 2019
GHSm GHSm
Assets: Liabilities & Equity:
Reserves 600 Deposits 2,500
Securities 1,500 Equity 4,400
Loans & Advances 800
Property, Plant and Equipment 4,000 .
6,900 6,900
Assume a required reserve ratio of 10%.
What is the amount of excess reserves in this commercial banking system?

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