Mellon bank is a large bank holding company. Selected accounts from the company’s 2011 annual report are as follows (in millions):5
Cash and Due from Banks ...... $ 4,175
Loans to Customers........ 43,585
Securities Available for Sale.... 78,467
Deposits by Customers...... 219,094
1. Indicate whether each of these accounts is an asset, a liability, or a component of stockholders’ equity on Mellon Bank’s balance sheet.
2. Assume that you are in a position to do business with Mellon. Show how Mellon
Bank’s accountants would prepare the entry in T account form to record each of the following transactions:
a. You sell securities in the amount of $2,000 to the bank.
b. You deposit in the bank the $2,000 received from selling the securities.
c. You borrow $5,000 from the bank.