The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB):

Question:

U.S. Treasury bills ......................................$20
Demand deposits ........................................40
Mortgage-backed securities ......................30
Loans from other banks ..............................5
C&I loans .....................................................50
Discount loans ..............................................5
NOW accounts ............................................40
Savings accounts ........................................10
Reserve deposits with Federal Reserve .....8
Cash items in the process of collection .....5
Municipal bonds ...........................................5
Bank building ................................................4

a. Use the entries to construct a balance sheet similar to the one in Table 10.1 on page 308, with assets on the left side of the balance sheet and liabilities and bank capital on the right side.
b. RNB’s capital is what percentage of its assets?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...