Question

Assets Cash Last National Bank Balance Sheet 1 Liabilities and net worth Checkable $ 19.000 $ 115,000 deposits $ 98,000 Stock shares 280,000 $ 278,000 S Reserves Property Instructions: Enter your answers as whole numbers. a. Suppose a depositor at the bank writes a check for $25,000 to a contractor to pay for some remodeling work done on her home. The contractor deposits the check in his bank (which is a different bank). What will last National Bank's balance sheet look like after the check clears? Record the values in the table below. Last National Bank Balance Sheet 2 Assets Liabilities and net worth Checkable Cash deposits Reserves Stock shares Property b. If the reserve requirement is 10 percent, what is the total amount of excess reserves held by Last National Bank after the check

Answer 1

Answer a.

Last National bank's Balance sheet 2

Assets Liabilities Cash $ 19000 Checkable deposits $ 90000

Reserve $ 73000 Stock shares $280, 000

Property $ 278,000

Answer b.

Required reserve = 10 % of deposits

= $90, 000 × 10% =$9000

Excess reserve = total reserve - required reserve

= $73, 000 - $9000 =$ 64000