Question: A bank has a balance sheet as shown below At
A bank has a balance sheet as shown below. At the beginning of the month, the bank has $ 15,141,000 in its loan portfolio and $ 183,000 in the allowance for loan losses. During the month, management estimates that an additional $ 5,200 of loans will not be paid as promised. After another month, management feels there is no chance of recovering the loan and writes the $ 5,200 loan off its books. Assuming no other changes, show the bank’s balance sheet at the end of Month 1 and Month2.
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