3. The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB): U.S. Treasury bills Demand deposits Mortgage-backed securities Loans from other banks C&I loans Discount loans NOW accounts Savings accounts Reserve deposits with Federal Reserve Cash items in the process of collection Municipal bonds Bank building $20 DSSDSGD 40 30 5 50 5 40 10 8 5 5 4 (a) Use the entries to construct a balance sheet, with assets on the left side of the balance sheet and liabilities and bank capital on the right side. (b) Calculate RNB's leverage.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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3.
The following entries (in millions of dollars) are from the balance sheet of
Rivendell National Bank (RNB):
U.S. Treasury bills
Demand deposits
Mortgage-backed securities
Loans from other banks
C&I loans
Discount loans
NOW accounts
Savings accounts
Reserve deposits with Federal Reserve
Cash items in the process of collection
Municipal bonds
Bank building
$20
4355
40
30
50
5
40
10
8
5
5
4
(a)
Use the entries to construct a balance sheet, with assets on the left
side of the balance sheet and liabilities and bank capital on the right side.
(b)
Calculate RNB's leverage.
Transcribed Image Text:3. The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB): U.S. Treasury bills Demand deposits Mortgage-backed securities Loans from other banks C&I loans Discount loans NOW accounts Savings accounts Reserve deposits with Federal Reserve Cash items in the process of collection Municipal bonds Bank building $20 4355 40 30 50 5 40 10 8 5 5 4 (a) Use the entries to construct a balance sheet, with assets on the left side of the balance sheet and liabilities and bank capital on the right side. (b) Calculate RNB's leverage.
Expert Solution
Step 1: Introduction

The term balance sheet refers to a financial statement that details a company's assets, liabilities, and shareholder equity at a certain point in time. The assessment of a company's financial structure and the computation of investor return rates are both based on balance sheets. Balance sheets can be used along with other important financial data when performing fundamental analysis or computing financial ratios.

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