Homework Help is Here – Start Your Trial Now!
Business
Accounting
Big Bucks Bank. The reserve ratio is (1) (2) Liabilities and net wort 000$ 22.000 $ 22.000 Checkable deposits p00 38.000 38,000 p00 42.000 42,000 8 88

Big Bucks Bank. The reserve ratio is (1) (2) Liabilities and net wort 000$ 22.000 $ 22.000 Checkable deposits p00 38.000 38,000 p00 42.000 42,000 8 88

Cornerstones of Financial Accounting
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
See similar textbooks
icon
Related questions
Question

6

The following balance sheet is for Big Bucks Bank. The reserve ratio is 20 percent. Assets (1) (2) Llabilities and net worth (1) (2) $ 22,000 22.000$ 22,000 Checkable deposits 38.000 Reserves $ 100.000 $ 102,000 $102.000 Securties 38,000 38,000 Loans 40,000 42,000 42,000 c How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cieared against the bank? Show the new balance sheet in columns 2 and 2' by inserting the values into the gray shaded cells. d. Using the original figures, revisit questions a, b, and c based on the assumption that the reserve ratio is 15 percent Assets (4) Liabilities and nat worth (4) Reserves $ 22,000 Checkable deposts $ 100.000 Securities 38,000 Loans 40,000 What is the maximum amount of new loans that this bank can make? Show in columns 3 and 3' how the bank's belance sheet will appear after the bank has lent this additional amount Add values into the gray shaded cells of the table. By how much has the money supply changed? How will the bank's belance sheet appear after checks drawn for the entire amount of the new loans have been cleaned against the bank? Show this new balance sheet in columns 4 and 4 Add values into the gray shaded cels of the table
Transcribed Image Text:The following balance sheet is for Big Bucks Bank. The reserve ratio is 20 percent. Assets (1) (2) Llabilities and net worth (1) (2) $ 22,000 22.000$ 22,000 Checkable deposits 38.000 Reserves $ 100.000 $ 102,000 $102.000 Securties 38,000 38,000 Loans 40,000 42,000 42,000 c How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cieared against the bank? Show the new balance sheet in columns 2 and 2' by inserting the values into the gray shaded cells. d. Using the original figures, revisit questions a, b, and c based on the assumption that the reserve ratio is 15 percent Assets (4) Liabilities and nat worth (4) Reserves $ 22,000 Checkable deposts $ 100.000 Securities 38,000 Loans 40,000 What is the maximum amount of new loans that this bank can make? Show in columns 3 and 3' how the bank's belance sheet will appear after the bank has lent this additional amount Add values into the gray shaded cells of the table. By how much has the money supply changed? How will the bank's belance sheet appear after checks drawn for the entire amount of the new loans have been cleaned against the bank? Show this new balance sheet in columns 4 and 4 Add values into the gray shaded cels of the table
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Market Efficiency
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS