Balance sheet effect
A bank showed the following items (among other) on its balance sheet at January 1, 2000:
Total Deposits $41,644,000,000
1. Suppose you made a bank deposit of $1,000. How would each of the bank assets and equities be affected? How much would each of your personal assets and equities be affected? Be specific.
2. Suppose a branch makes a $900.000 loan at a local hospital for remodeling. What would be the effect on each of the branch's assets and equities immediately after the loan is made? Be specific.
3. Suppose you borrowed $10,000 from a trust company on a personal loan. How would such a transaction affect your personal assets and equities?
1. Bank assets (cash) will increase by $1000 and equities (deposits) will increase by ...
The solution provides a sentence or two in response to each question that answers the effects of transactions on both personal and bank activity.