Homework Answers
First see the journal entries of these transactions-
a) Cleaning Ac. Dr $10000
To Customer's Ac $10000
( a customer deposit $10000 check)
b) Cash Ac Dr. $10000
To Clearing Ac. $10000
( Check get cleared and funds available)
c) Reserve Ac Dr. $1000
To Cash Ac. $1000
( 10% of deposit transferred to Reserve Ac)
d) Car loan Ac Dr $1000
To Cash Ac. $1000
( Car loan given)
Customer's T account of Bank-
| Debit | Credit |
| $10000 | |
Bank's Cash Ac -
| Debit | Credit |
| $10000 | $1000 |
Bank's Reserve Ac-
| Debit | Credit |
| $1000 | $1000 |
Car loan Ac-
| Debit | Credit |
| $1000 | |
Add Answer to:
a) A customer deposits $10,000 check into her checking account. Use a T-account to show how...
Tracy Williams deposits $500 that was in her sock drawer into a checking account at the...
Tracy Williams deposits $500 that was in her sock drawer into a
checking account at the local bank
If the bank maintains a serve ration of 10%, how will it respond
to the new deposit?
12. (Problem 5b) Tracy Williams deposits $500 that was in her sock drawer into a checking account at the local bank. If the bank maintains a reserve ratio of 10%, how will it respond to the new deposit? O The bank will hold $50 as...
Suppose the Federal Reserve purchases $10,000 of Treasury bonds from you and that you deposit the...
Suppose the Federal Reserve purchases $10,000 of Treasury bonds from you and that you deposit the $10,000 into your checking account deposit at Bank Y. Assume that Bank Y has no excess reserves at the time you make your deposit and that the required reserve ratio is 20 percent. a. Use a T-account to show the initial effect of this transaction on Bank Y's balance sheet. b. Suppose that Bank Y makes the maximum loan they can from the funds...
Suppose that a lottery winner deposits $20 million in cash into her transactions account at the...
Suppose that a lottery winner deposits $20 million in cash into her transactions account at the Bank of America. Assume a reserve requirement of 30 percent and no excess reserves in the banking system prior to this deposit. Show the changes on the Bank of America balance sheet when the $20 million is initially deposited. BANK OF AMERICA Assets Liabilities Change in required reserves ? million Change in Deposits ? million Change in excess reserves ? million Change in total...
Suppose Janice takes $4,000 in coins to the bank to deposit into her checking account. Assume...
Suppose Janice takes $4,000 in coins to the bank to deposit into her checking account. Assume the reserve requirement at all banks is 20%. When Janice deposits the $4,000 into the bank, the bank can lend Mary, another one of the bank's customers, $ Suppose Mary takes the loan and use it to buy a used car from Susan. When Susan deposits the check in her bank, Susan's bank can lend $ to Eva, another one of the bank's customers....
Regarding commercial banking balance sheets. First, use a T-account to show how a $100 deposit affects...
Regarding commercial banking balance sheets. First, use a T-account to show how a $100 deposit affects the balance sheet. Separate the funds into required reserves and excess reserves using a required reserve ratio of 0.1. Second, demonstrate what happens to the balance sheet when the bank loans out all of the excess reserves. Third, demonstrate what happens to the balance sheet after loaned funds are deposited in a different bank. Do not copy and paste. Please
Suppose a bank has $100,000 in checking account deposits with no excess reserves and the required...
Suppose a bank has $100,000 in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve raises the required reserve ratio to 12 percent, then the bank will now have excess reserves of A) $12,000. B) $0. C) -$2,000. D) -$12,000.
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity...
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. The Federal Reserve buys a government bond worth $500,000 from Brian, a client 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 T-account (before the bank makes any new loans). Complete the foilowing...
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity...
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 5%. Gilberto, a client of First Main Street Bank, deposits $200,000 into his checking account at First Main Street Bank Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Assets Labilities Complete the following table to show the effect of a...
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity...
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. The Federal Reserve buys a government bond worth $250,000 from Alex, a client 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 T-account (before the bank makes any new loans)....
I am unsure if the first part of the answered question is correct, can you please...
I am unsure if the first part of the answered question is correct,
can you please explain how I can go about answering this
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10% . Edison, a client of First Main Street Bank, deposits $500,000 into his checking account at First Main Street Bank. loans) Complete the following table to reflect any...
Tracy Williams deposits $500 that was in her sock drawer into a
checking account at the local bank
If the bank maintains a serve ration of 10%, how will it respond
to the new deposit?
12. (Problem 5b) Tracy Williams deposits $500 that was in her sock drawer into a checking account at the local bank. If the bank maintains a reserve ratio of 10%, how will it respond to the new deposit? O The bank will hold $50 as...
Suppose the Federal Reserve purchases $10,000 of Treasury bonds from you and that you deposit the $10,000 into your checking account deposit at Bank Y. Assume that Bank Y has no excess reserves at the time you make your deposit and that the required reserve ratio is 20 percent. a. Use a T-account to show the initial effect of this transaction on Bank Y's balance sheet. b. Suppose that Bank Y makes the maximum loan they can from the funds...
Suppose Janice takes $4,000 in coins to the bank to deposit into her checking account. Assume the reserve requirement at all banks is 20%. When Janice deposits the $4,000 into the bank, the bank can lend Mary, another one of the bank's customers, $ Suppose Mary takes the loan and use it to buy a used car from Susan. When Susan deposits the check in her bank, Susan's bank can lend $ to Eva, another one of the bank's customers....
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 5%. Gilberto, a client of First Main Street Bank, deposits $200,000 into his checking account at First Main Street Bank Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans). Assets Labilities Complete the following table to show the effect of a...
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10%. The Federal Reserve buys a government bond worth $250,000 from Alex, a client 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 T-account (before the bank makes any new loans)....
I am unsure if the first part of the answered question is correct,
can you please explain how I can go about answering this
7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 10% . Edison, a client of First Main Street Bank, deposits $500,000 into his checking account at First Main Street Bank. loans) Complete the following table to reflect any...
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