Below is the simplified balance sheet of Gorgonzolan commercial banks at some point in time. Liabilities Assets Currency (reserves) Loans Amount 400,000 Deposits 100,000 Amount 500,000 Assume that the Gorgonzolan commercial banks desire to hold reserves of 5 percent of deposits and that the public holds no currency long term. Instructions: Enter your responses as whole numbers. a. Given the data in the balance sheet, the Gorgonzolan commercial banks want to hold 25000 in reserves. b. The Gorgonzolan commercial banks currently have 375000 in extra reserves that they would like to lend out. c. Assuming that no additional reserves enter the Gorgonzolan banking system, the final values of bank reserves, loans, and deposits are: Final consolidated balance sheet Assets Currency Final value of bank reserves Loans Amount 450000 O 450000 O d. The final value of the money supply is: 900000 Liabilities Deposits guilders. Amount 900000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Only part c and d please thanks explain
Below is the simplified balance sheet of Gorgonzolan commercial banks at some point in time.
Assets
Currency (reserves)
Loans
Amount
400,000
100,000
Amount
500,000
Assume that the Gorgonzolan commercial banks desire to hold reserves of 5 percent of deposits and that the public holds no currency
long term,
Instructions: Enter your responses as whole numbers.
a. Given the data in the balance sheet, the Gorgonzolan commercial banks want to hold 25000
Final consolidated balance sheet
in reserves.
b. The Gorgonzolan commercial banks currently have 375000 in extra reserves that they would like to lend out.
c. Assuming that no additional reserves enter the Gorgonzolan banking system, the final values of bank reserves, loans, and deposits
are:
Assets
Currency Final value of bank
reserves
Deposits
Loans
Liabilities
Amount
450000 O
450000 O
d. The final value of the money supply is: 900000
Liabilities
Deposita
guilders.
Amount
900000
Transcribed Image Text:Below is the simplified balance sheet of Gorgonzolan commercial banks at some point in time. Assets Currency (reserves) Loans Amount 400,000 100,000 Amount 500,000 Assume that the Gorgonzolan commercial banks desire to hold reserves of 5 percent of deposits and that the public holds no currency long term, Instructions: Enter your responses as whole numbers. a. Given the data in the balance sheet, the Gorgonzolan commercial banks want to hold 25000 Final consolidated balance sheet in reserves. b. The Gorgonzolan commercial banks currently have 375000 in extra reserves that they would like to lend out. c. Assuming that no additional reserves enter the Gorgonzolan banking system, the final values of bank reserves, loans, and deposits are: Assets Currency Final value of bank reserves Deposits Loans Liabilities Amount 450000 O 450000 O d. The final value of the money supply is: 900000 Liabilities Deposita guilders. Amount 900000
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