3. Suppose you dopiest SR 5000 in currency into your checking account at a branch of Al-Rajhi Bank, which we will assume that the required reserve ration is %10. a. Use a T-account to show the initial effect of this transaction on Al-Rajhi's balance sheet. b. Suppose that Al-Rajhi Bank makes the maximum loan it can from the fund you deposited. Use a T-account to show the the initial effect of this transaction on Al- Rajhi's balance sheet. Also include in this T-account the transaction from part (a). c. Now suppose that whoever took out the loan in part (b) writes a check for this amount and that person receiving the check deposit in Alinma Bank. Use a T-account to show the the initial effect of this transaction on Alinma's balance sheet.
3. Suppose you dopiest SR 5000 in currency into your checking account at a branch of Al-Rajhi Bank, which we will assume that the required reserve ration is %10. a. Use a T-account to show the initial effect of this transaction on Al-Rajhi's balance sheet. b. Suppose that Al-Rajhi Bank makes the maximum loan it can from the fund you deposited. Use a T-account to show the the initial effect of this transaction on Al- Rajhi's balance sheet. Also include in this T-account the transaction from part (a). c. Now suppose that whoever took out the loan in part (b) writes a check for this amount and that person receiving the check deposit in Alinma Bank. Use a T-account to show the the initial effect of this transaction on Alinma's balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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3. Suppose you dopiest SR 5000 in currency into your checking account at a branch of
Al-Rajhi Bank, which we will assume that the required reserve ration is %10.
a.
Use a T-account to show the initial effect of this transaction on Al-Rajhi's balance
sheet.
b. Suppose that Al-Rajhi Bank makes the maximum loan it can from the fund you
deposited. Use a T-account to show the the initial effect of this transaction on Al-
Rajhi's balance sheet. Also include in this T-account the transaction from part (a).
c. Now suppose that whoever took out the loan in part (b) writes a check for this amount
and that person receiving the check deposit in Alinma Bank. Use a T-account to show
the the initial effect of this transaction on Alinma's balance sheet.
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Step 1: Balance sheet:
VIEWStep 2: (a) Show the initial impact of the transaction on Al-Rajhi Bank's Balance Sheet:
VIEWStep 3: (b) Show the initial impact of the transaction if Bank makes the maximum loan it:
VIEWStep 4: (c) Show the effect of the transactions on the balance sheets of both banks:
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