The following balance sheet is for Big Bucks Bank. The reserve ratio is 20 percent.Assets(1)(2)Liabilities and net worth(1)(2)Reserves$ 22,000 $ 22,000$ 22,000 Checkable deposits$ 100,000$102,000 $ 102.000Socurities38,00038,00038,000Loans40,00042.00042,000c How will the bank's balance sheet appear after checks drawn for the entire amount of the new loans have been cleared against thebank? 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(3)(4)Llabilities and net worth6,(4)Reserves$ 22,000Checkable deponts$ 100,000Securities38,000Loan40,000What is the maximum amount of new loans that this bank can make?$1Show in columns 3 and 3' how the bank's balance sheet will appear after the bank has lent this additional amount. Add values into thegray 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 cleared against thebank? Show this new balance sheet in columns 4 and 4. Add values into the gray shaded cells of the table.

the Maximum Amount of new loans that this bank made is $12000 The money supply has changed by…

Answered: What is the maximum amount of new loans…

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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The figures in the table below are for a single commercial bank. All figures are in thousands of dollars. Refer to the data given above. If the reserve ratio is 10 percent and a check for $10,000 is drawn and cleared in favor of another bank, then the bank above will end up with excess reserves of: Select one: a. $8,000 b. $12,000 c. $13,000 d. $18,000

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What is the maximum amount of new loans that this bank can make? Show in columns 3 and 3' how the bank's balance 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?