Question

Net Income Provision for loan losses Income taxes Increases in bank's undivided profits 3. If you know the following figures: Total interest income $140 Total interest expenses Total noninterest income Total noninterest expenses Please calculate these items: Net interest income Net noninterest income Pretax net operating income Net income after taxes Total operating revenues Total operating expenses Dividends paid to common stockholders 4. If you know the following figures: Gross loans Allowance for loan losses Investment securities Common stock Surplus Total equity capital Cash and due from banks Miscellaneous assets Bank premises and equipment, gross Please calculate these items: Total assets Net loans Undivided profits $300 15 36 5 15 30 10 Trading-account securities Other real estate owned Goodwill and other intangibles Total liabilities Preferred stock Nondeposit borrowings Bank cramises and equipment, net Fed funds sold Depreciation Total deposits

Answer 1

Answer 3 :
NOTE : It has been assumed that the given company is a bank and hence interest income/expense is of operating nature. The fact that question mentions increase in "BANKS" undivided share is also indicative of company in question being a bank.
1	Net Interest income = 140$ - 100$ = 40$
2	Net noninterest income = 75$ - 90$ = Loss of 15$
3	Pretax net operating income = Net interest income + Net noninterest income - Provision for loan losses = 40$ - 15$ - 5$ = 20$
4	Net income after taxes = Pretax net operating income - Taxes = 20$ - 4$ = 16$
5	Total operating revenues = Interest revenue + Noninterest revenue = 140$ + 75$ = 215$
6	Total operating expenses = Interest expenses + Noninterest expenses + Provision for loan losses = 100$ + 90$ + 5$ = 195$
7	Dividends paid to common stockholders = Net income after taxes - Increase in bank's undivided surplus = 16$ - 6$ = 20$
Logic for dividend paid is that increase in bank's undivided surplus basically represents that amount of current year profit which has been retained by the company and not distrinbuted. Hence it is logical to assume that the other part of profit has been distributed and hence accordingly we have computed the dividend paid.
Answer 4 :
1	Total assets = Total liabilities + Total equity capital = 375$ + 30$ = 405$
2	Net loans = Gross loans - Allowance for loans = 300$-15$ = 285$
3	Undivided profits = Total equity capital - Common Stock - Preferred Stock - Surplus = 30$-5$-15$-3$ = 7$
4	Fed funds sold = Total assets as calculated in 1 above - All assets given in question = 405$ - 385$ = 20$ (REFER NOTE 1)
5	Depreciation = Bank premisses, gross - Bank premisses, net = 25-20 = 5$
6	Total deposits = Total liabilties - Nondeposit borrowings = 375$-40$ = 335$
Note 1 :
Total assets = 405 $
Assets given in question :
Asset	Amount ($)
Net loans	285
Investment Securities	36
Cash	10
Miscellaneous assets	25
Bank premisses, net	20
Trading-account securities	2
Other real estate owned	4
Goodwill	3
Total	385