Related to Solved Problem 10.1] The following entries (in millions of dollars) a

Question

Related to Solved Problem 10.1] The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB): $25 $50 $25 U.S. Treasury bills Demand deposits Mortgage-backed securities Loans from other banks C&l; loans Discount loans NOW accounts Savings accounts Reserve deposits with Federal Reserve Cash items in the process of collection Municipal bonds Bank building $53 $10 S9 Use the entries given above to construct the following balance sheet which is similar to the one displayed in the text. Assets Liabilities+Bank Capital Total Assets Total Liabilities Bank Capital

Explanation / Answer

Assets Liabilities+Bank Capital U.S. Treasury Bills 25 Demand Deposits 50 Mortgage bakced securities 25 Loans from Other Banks 5 C&I loans 53 Discount Loans 10 Municipal bonds 7 NOW accounts 42 Cash items in the process of collection 6 Savings Accounts 6 Bank Building 5 Reserve Deposits with federal reserve 9 Total assets 130 Total liabilities 113 Bank capital 17

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