Please answer Assume that the Fed buys a $3,000 government security from Judy, who deposits the $3,000 in her checking account at the LastNational Bank. (Assume that Last National's T-account balances start at zero before the deposit.) The Last National Bank puts $400of this money in vault cash, and the remainder is deposited at the Fed. Assuming a required reserve ratio of 20% for all banksanswer questions a and b.a.Fill in the blanks in the balance sheet below for the Last National Bank.Balance Sheet for Last National BankAssetsLiabilitiesLegal Reserves7.S| Demand Deposits 8.S.Vault cash9. S| Judy 10. SDeposits at Fed11.SRequired Reserves12. SExcess Reserves13. SLoansb. Assume that Rudy goes to the Last National Bank and gets a loan of $2400 in the form of a new checking account (demanddeposit). What would this do to the values of the bank's assets and liabilities? Fill in the blanks below with your answers.Balance Sheet for Last National BankAssetsLiabilitiesLegal Reserves14. S| Demand Deposits 15. SVault cash16. SJudy17.SDeposits at Fed18. S| Rudy 19.SRequired Reserves 20. SExcess Reserves21.SLoans22. S

Financial statements are a part of reporting and displaying the financial activities and position of…

answer questions a and b. a. Fill in the blanks in the balance sheet below for the Last National Bank. Balance Sheet for Last National Bank Assets Liabilitics Legal Reserves 7.S | Demand Deposits 8.S Vault cash 9. S | Judy 10. S Deposits at Fed 11.S

answer questions a and b. a. Fill in the blanks in the balance sheet below for the Last National Bank. Balance Sheet for Last National Bank Assets Liabilitics Legal Reserves 7.S | Demand Deposits 8.S Vault cash 9. S | Judy 10. S Deposits at Fed 11.S

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Need answers for number 4 (A and B)
Assume the Bank of Smallville opens its doors to depositors and receives $100,000 in cash deposits. a) Prepare a balance sheet for Bank of Smallville based on the above information. b) Assume furthermore that the bank has to abide by a 20% reserve ratio. How much in excess reserves does the bank hold? Could this bank make a loan in the amount of $90,000? Briefly explain. c) Based on the amount of excess reserves, if the bank makes the loans, show the immediate impact on the Bank of Smallville's balance sheet. d) Calculate value of the money multiplier? e) How much money would be created in the banking system if other banks also lend as much as possible? Part B a) What is meant by the term "excess supply of money?" How does the money market resolve this disequilibrium? b) Explain with diagrams, what happens to the money supply, interest rates, investment spending and GDP when the central bank makes open market purchases.
Need answers for 1, 2, and 3
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1.use the T-account to show the effect on First National Bank a. You repay a $100 loan from First National Bank by writing a $100 check from your Second National Bank checking account. b. The Fed purchases $100 of government bonds from FNB.
A bank starts with $200 in deposits. The required reserve ratio is 10%. The bank loans out 70% of all non-required deposits and invests the rest in short-term securities. The bank capital is $15. a) Draw up a T-account for the above bank. List all assets and liabilities(+equity) in Ș. b) How much money can be withdrawn from this bank before it requires external help to avoid failure? Try and exhaust all internal measures before declaring panic. c) Would a bank want to reach the point you found in b) before asking for help? Why or why not? Prohlem 3
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Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 20%. The Federal Reserve buys a government bond worth $750,000 from Lorenzo, a customer of First Main Street Bank. He deposits the money into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's balance sheet (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effects of the new deposit on excess and required reserves, assuming a required reserve ratio of 20%. Hint: If the change is negative, be sure to enter the value as a negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 750,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Juanita, who immediately…
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