+Cash ReservesOf which RequiredASSETSExcess reservesLoansSecuritiesIncludes $10 million USTSMortgagesLoans to other banks$10 million$5 million$5 million$55 million$15 million$12 million$3 millionDemand DepositsSavings DepositsCDsLIABILITIESBorrowing from FROwners' EquityA. Does this bank meet a 10% required reserve requirement? Explain.B. Does this bank meet an 8% capital to asset ratios? Why or why not?$50 million$10 million$20 million$5 million$10 millionC. A new firm comes into town. It is seeking funding to build a new plant. Can this bank competefor that business? How?

The Reserve Requirement is the minimum amount that a commercial bank must hold in liquid assets to…

Answered: Cash Reserves Of which Required ASSETS…

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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B1. Account the fed makes a $100 million loan to the A bank. Show this transaction on the balance sheet of banking system and the fed.?
2) Calgary Finance Bank has the following balance sheet: Assets Liabilities $100 $1000 Chequable Deposits Capital $1000 $100 Reserves Loans Assume there is no excess reserve. One day Jack luckily finds a bill of $20 underneath his mattress and he deposits it into this bank. a) Describe how this deposit may affect Calgary Finance Bank's balance sheet. b) What will be the excess reserve now? c) To keep reserve ratio at target level, what would this bank do? How would the action affect its balance sheet? d) If all commercial banks have the same target reserve ratio as this bank, and there is no cash drain, what will be the change in total deposits for the whole banking system after the process of money creation is completed?
1. (Credit Creation) Understanding bank balance sheet is useful since it also helps our understanding of the process called "credit creation." This process shows that the Fed (central bank)'s policy of increasing the money supply is enhanced by banks' operations. Suppose an occurrence of the Fed's open market purchase proceed as follows: 1. The Fed decided to purchase $100 millions of securities from Bank A. 2. Bank A holds 10% of its increase in liquidity as required reserves, 40% as excess reserves, and use 50% as loans to Borrower A. 3. Borrower A holds 50% of her liquidity as currency and 50% as deposits in Bank B. 4. Bank B holds 10% of its increase in liquidity as required reserves, 40% as excess reserves, and use 50% as loans to Borrower B. 5. Borrower B holds 50% of her liquidity as currency and 50% as deposits in Bank C. 4. Finally, Bank C holds all of its increase in liquidity as reserves (required re- serves plus excess reserves). Hence the deposit creation process stops…
How does Long-Term Bank Loan impact Avett Inc.'s 2020 Statement of Cash Flows? Question 10 options: The periodic change in Long-Term Bank Loan is added in Cash Flows from Operations The periodic change in Long-Term Bank Loan is added in Cash Flows from Financing The periodic change in Long-Term Bank Loan is subtracted in Cash Flows from Financing The periodic change in Long-Term Bank Loan is added in Cash Flows from Investing The periodic change in Long-Term Bank Loan is not included on the Statement of Cash Flows The periodic change in Long-Term Bank Loan is subtracted in Cash Flows from Operations The periodic change in Long-Term Bank Loan is subtracted in Cash Flows from Investing
Mi Tierra Bank Assets Liabilities Required reserves Excess reserves $10,000 Demand deposits $5,000 S85,000 Owner's equity $100,000 Loans (d) Assume that Luis withdraws $5,000 in cash from his checking account at Mi Tierra Bank. (iii) What is the maximum change in the amount of money supply as a result of this withdrawal?
Additional short-term borrowings Purchase of short-term stock investments Cash dividends paid Interest paid $ 20,000 5,000 16,000 8,e00 Compute cash flows from financing activities using the above company information. (Amounts to be deducted should be indicated by a minus sign.) Financing Activities $ 8:30 PM 3/27/2022 Insert Prt Sc F7 F8 F9 F10 F11 F12 F3 F4 F5 F6 Lock + &
2
Risk Weight Bank Liabilities $ Bank Assets Cash and Treasury Securities Repurchase Agreements Municipal Bonds Single Family Home Mortgages $ 2,700 CMOS Commercial Loans Agricultural Loans Allowance for Loan Loss Bank Buildings Total $ 2,000 $ 1,000 $ 1,500 0% Deposits 20% Hot Money 20% Subordinated Debt 8,000 2$ 6,000 24 250 50% Common Stock 2$ 100 $ 2,500 $ 1,500 $ 2,100 $ (300) $ 2,000 $ 15,000 50% Surplus 100% Retained Earnings 2$ 300 2$ 350 100% 0% 100% 2$ 15,000 1. Calculate the minimum leverage capital for this bank.
Calculate bank’s ratio of Tier 1 capital to risk-weighted-assets and total capital to risk-weighted-assets under the terms of Basel 1 Agreement by using the following information. On Balance Sheet Items (Assets) Amount $ Cash 4,000,000 U.S Treasury securities 30,600,000 Deposit balances due from other banks 4,000,000 Loans secured by first liens on residential property (1-4 family dwellings) 66,000,000 Loans to corporations 105,300,000 Off Balance Sheet Items Standby letters of credit backing municipal bond 20,500,000 Long term unused loan commitments to corporate customers 25,500,000 Tier 1 capital 7,500,000 Tier 2 capital 5,800,000
Comparative statement of financial position of Alpha Sdn Bhd as at 31 December 2023 and 2022 are as following: 2023 2022 RM million RM million Cash at bank 108.5 50.4 Accounts receivable (less: provision for doubtful debts) 393.0 219.0 Inventories 84.0 134.4 585.5 403.8 Plant and equipment (NBV) 475.6 364.8 Investment in government securities 33.6 33.6 509.2 398.4 Total assets 1,094.7 802.2 Ordinary shares 530.0 290.0 180 million 10% Preference shares 180.0 180.0 Retained earnings 105.0 73.5 815.0 543.5 Accounts payable 205.9 197.8 Tax payable 15.0 10.0 Deferred taxation 37.8 50.9 10% Debentures 21.0…
2. Mean Green Bank started its first day of operations with $10 million in capital. $100 million in checkable deposits is received. The bank issues a $30 million commercial loan and another $30 million in mortgages. The required reserves are 8%.
Ff251.

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