The following table shows the balance sheet for First Community Bank. Compute the value of the bank's capital and enter it in the balance sheet. Then answer the question that follows. Balance sheet of First Community Bank as of January 4, 2021 Assets Liabilities Reserves $275,000 Checkable deposits $5,375,000 Securities $1,200,000 Loans $4,300,000 Bank's capital (net worth) $ Total $5,775,000 Total $5,775,000 insolvent Suppose that Eric, a b the lo situation, the bank is solvent First Community Bank, defaults on a $300,000 loan, and the collateral offered to get the loan is worthless. This will ding portion of the bank's balance sheet, and it will the bank's capital to $ In this

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The following table shows the balance sheet for First Community Bank.
Compute the value of the bank's capital and enter it in the balance sheet. Then answer the question that follows.
Balance sheet of First Community Bank as of January 4, 2021
Assets
Liabilities
Reserves
$275,000
Checkable deposits
$5,375,000
Securities
$1,200,000
Loans
$4,300,000
Bank's capital (net worth)
$
Total
$5,775,000
Total
$5,775,000
insolvent
Suppose that Eric, a b
the lo
situation, the bank is
solvent
First Community Bank, defaults on a $300,000 loan, and the collateral offered to get the loan is worthless. This will
ding portion of the bank's balance sheet, and it will
the bank's capital to $
In this
Transcribed Image Text:The following table shows the balance sheet for First Community Bank. Compute the value of the bank's capital and enter it in the balance sheet. Then answer the question that follows. Balance sheet of First Community Bank as of January 4, 2021 Assets Liabilities Reserves $275,000 Checkable deposits $5,375,000 Securities $1,200,000 Loans $4,300,000 Bank's capital (net worth) $ Total $5,775,000 Total $5,775,000 insolvent Suppose that Eric, a b the lo situation, the bank is solvent First Community Bank, defaults on a $300,000 loan, and the collateral offered to get the loan is worthless. This will ding portion of the bank's balance sheet, and it will the bank's capital to $ In this
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