b. If total liabilities and capital were $15.5 million, what would be the amount of the owners’ capital (note: not loans)? Note: reference here should be to “owners’ capital” and not “loans” which would be on the assets side of the balance sheet. The amount of “loans” cannot be determined in this problem. c. If total liabilities and capital were $14 million, and $1 million of deposits were withdrawn from the bank, what would be the amount of the owners’ capital? 5. Following are selected balance sheet accounts for the Third State Bank: vault cash = $2 million; U.S. government securities = $5 million; demand deposits = $13 million; nontransactional accounts = $20 million; cash items in process of collection = $4 million; loans to individuals = $7 million; loans secured by real estate = $9 million; federal funds purchased = $4 million; and bank premises = $11 million. a. From these accounts, select only the asset accounts and calculate the bank’s total assets.
4 5 7 9 b. Calculate the total liabilities for the Third State Bank. 4 c. Based on the totals for assets and liabilities, determine the amount in the owners’ capital account. 6. A bank’s assets consist of:Cash: $1.5 million Loans: $10 million Securities $4.5 million Fixed assets $2 million In addition, the bank’s owners’ capital is $1.5 million.a. Calculate the equity capital ratio. b. If $2 million in bad loans were removed from the bank’s assets, show how the equity capital ratio would change.
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