on a bank's balance sheet assets are quizlet
The social security tax rate is 6.2%, and the Medicare tax rate is 1.45%. A loan of excess reserves from one bank to another bank is recorded as a ______ for the borrowing bank and a _____ for the lending bank. "For example, wages and salaries should be $23,200 plus$16.30 per repair-hour. 1. 30. Regulators require a bank to hold some of its assets as reserves mainly to address: 73. If the interest rate on assets decreases from 6 to 5 percent, and the interest rate on liabilities decreases from 4 to 3, percent the impact on the bank's profits per $100 of assets will be: 85. If a bank has $150 million in assets and a net worth of $20 million, its asset-to-equity ratio is: 50. \end{matrix} Use the format shown in your working papers. For example, vessel operating costs should be $5,200 per month plus$480 per cruise plus $2 per passenger. The costs Relating to the starter assemblies for the past 12 months were as follows: Over the past year, Division 3 manufactured 150,000 starter assemblies. 2. Should Garden accept the offer? \text{Selling:} & \text{ }\\ \text{Sales} & \text{\$450.000} & \text{100\\%} & \text{\$ 150.000 } & \text{100\\%} & \text{\$ 300.000} & \text{100\\%}\\ Using D to represent the batches of Dellas Delight and B to represent the batches of Bonnys Bourbon made and sold each day, formulate Shirras decision as an LP model. 2. what are federally chartered banks called, office of the comptroller of the currency, Congress introduced deposit insurance in response to, large numbers of depositors withdrawing their deposits within a short period of time, the federal reserve system was created in response to, the federal reserve system was created in, prohibited national banks from operating branches outside their home states, During a banking panic, a lender of last resort will, make loans to solvent but temporarily illiquid banks. they are borrowings from the FED, they may also be called advances, they are a liability. After preparing the following income statement, the company is concerned about the net loss on its No. To provide relevant information about the cash receipts and cash payments of an enterprise during a period. A bank faces foreign exchange risk when: 90. 2. The costs of mixing, heating, and extracting the drug amount to$155,000 per batch. Garden uses the net realizable value method for allocating joint production costs. Which of the following is a bank asset? What is the monetary multiplier and how does it relate to the reserve ratio? How do you explain the change in the segment margin ratio? Denver Engineering manufactures small engines that it sells to manufacturers who install them in products such as lawn mowers. This causes most of the depositors to line up in front of the bank the next morning wanting to withdraw their deposits. Using your answers to part 1, prepare an income statement using the joint costs allocated on a sales value basis. If a bank's return on equity remains constant, but the ratio of bank assets to bank capital increases: 57. \text{Della's Delight} & \text{30} & \text{0} & \text{10}\\ 33. Considering a bank's balance sheet, which of the following statements is false? 3. $$ 2. 2. The companys delivery cost records show that $30,000 of the$67,500 relates to crating the No. predict statistically whether an individual is likely to default on a loan. Which asset is sometimes referred to as a bank's secondary reserves? Dellas Delight goes through the Mixing and Baking departments, and Bonnys Bourbon, a filled cookie, goes through the Mixing, Filling, and Baking departments. these funds are cash belonging to commercial banks, but they are a claim the commercial banks have against the Fed. What did Huck do that showed he valued Jim's friendship? 63. In what ways does Daedalus show how clever he is? & \text{Department Minutes}\\ Which of the following statements best completes this sentence: "On a bank's balance sheet. net worth is reduced by the amount of the decline int he value of the loan. & \text{Mixing} & \text{Filling} & \text{Baking}\\ selling directly to investors loans or securities that were formerly held by financial intermediaries. \end{matrix} Checkable deposits have decreased since the 1970's mainly because: 24. A bank's off-balance-sheet activities usually: 64. In your working papers, indicate the assumption from the list below that best matches each numbered statement. 3. if changes in interest rates cause bank profits to fluctuate. A non-transaction deposit would include each of the following, except: 36. For every $100 in assets, a bank has $30 in interest-rate sensitive assets, and the other $70 in non-interest-rate sensitive assets. \text{Truck operating expenses} & \text{\$ 6.400} & \text{\$ 1.70}\\ \text{Monthly fixed costs }\\ A bank's net interest margin is calculated by taking net interest income and: 61. The company expects its sales to be $44.50 per repair-hour." Accountants expect a business to last indefinitely. Cash account is increased by the amount of the fee. On 1/9/17, the bill is paid in full. 1. What is the significance of excess reserves? \text{Total available per day} & \text{660} & \text{270} & \text{300}\\ Bank's hold marketable securities as part of their assets. & \text{No. \text{Common fixed expenses not traceable to offices} & \text{63.000} & \text{14\\%}\\ Which asset is most liquid? The personal property of a business owner is not included in the accounting records of the business. 2 peaches and hauling them to the buyer. Compute the companywide break-even point in dollar sales. Also, compute the break-even point for the Chicago office and for the Minneapolis office. If Garden were to use the constant gross-margin percentage NRV method instead, how would it allocate its joint costs? \text{Total} & \text{ } & \text{ } & \text{ $\$ 957.56$}\\ \text{Sell, Richard} & \text{M} & \text{2} & \underline{196.81}\\ on a banks balance sheet, bank capital is considered, Businesses hold substantial balances in demand deposits for all of the following reasons EXCEPT, which of the following statements about a checking deposit is TRUE, it is an asset for households by a liability for a bank, which of the following is a hybrid of a checking and savings account, which of the following is not covered by federal deposit insurance, which fo the following involves banks borrowing funds from firms or other banks using the value of underlying securities as collateral, as a result of the financial crisis, checkable deposits, roughly doubled in terms of the precent of liabilities, the very low interest rates following the financial crisis of 2007-2009 resulted in, many people moving their funds from CDs and money market accounts to checking accounts in order to have more liquidity without sacrificing much interest, as of 2016, mortgage backed securities made up what portion of securities held by a bank, on a banks balance sheet, total assets are equal to, in banking, the spread refers to the difference between the, average interest rate earned on assets and the average interest rate paid on liabilities, When a bank issues a checkable deposit and loans the funds out to a business, it has transformed, a financial asset for a saver into a liability for a borrower, if you have a checking account at first national bank, the account is, an asset to you and a liability to first national, which of the following is the source of funds for bank loans, a banks costs include all of the following EXCEPT, the fees paid to maintain its reserves at the federal reserve, a banks revenue comes from all of the following except, the difference between the interest a bank earns on loans and securities and the interest paid on deposits and debt divided by the total value of its assets is called, For a bank, the ratio of after-tax profit to assets is its, The ratio of a bank's after-tax profit to bank capital is known as, The ratio of bank capital to bank assets is known as the bank's, Moral hazard can contribute to high bank leverage in all of the following ways EXCEPT, In order to reduce the likelihood of excessive leverage in the banking system, governments have traditionally, imposed capital requirements on commercial banks. the amount of checkable deposits that banks are required by regulation to hold are the. Garden estimates that it will cost about $35 per pint to do the required modification. Which of the following is not a bank asset? Trading risk faced by U.S. banks results from: 89. \text{Supporting direct labor (direct labor-hours)} & \text{\$ 200.000} & \text{10.000} & \text{40.000} & \text{50.000}\\ 2. If the interest rate on assets increases from 5 to 6 percent, and the interest rate on liabilities increases from 3 to 4, percent the impact on the bank's profits per $100 of assets will be: 86. 2} & \text{No. 29. A category of assets for banks is cash items in the process of collection. & \text{Della's Delight} & \text{Bonny's Bourbon}\\ \text{Executive salaries} & \text{\$ 2.500 per month}\\ The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools: \text{Cleary, Kevin} & \text{S} & \text{0} & \text{$\$ 155.60$}\\ \text{Jackson, Marvin} & \text{M} & \text{1} & \text{216.40}\\ Assume no change in fixed costs. What are the possible consequences to each? Garden Labs produces a drug used for the treatment of arthritis. 3} & \text{Combined}\\ What are the two main divisions of the nervous system (NS)? 23. $$ \text{Direct labor-hours per unit} & \text{1.0 DLHs} & \text{0.8 DLHs}\\ \text{Revenue per batch} & \text{\$475} & \text{\$375}\\ On the basis of financial considerations alone, should Denver Engineering accept the outside offer? \text{ } & \text{Fixed Cost per Month} & \text{Cost per Repair-Hour}\\ 3. Alyeski Tours operates day tours of coastal glaciers in Alaska on its tour boat the Blue Glacier. ; sell more bank stock, buy bank stock, acquire new funds by selling negotiable CDs and increase assets with them, pay higher dividends, If a bank needs to raise the amount of capital relative to assets, a bank manager might choose to, Because borrower, once they have a loan, are more likely to invest in high-risk investment projects banks face ___, In order to reduce the ____ problem in the loan markets, bankers collect information from prospective borrowers to screen out the bad credit risks from the good ones. Data. A mortgage given by a bank is ___________ to the bank and ___________ to the borrower. \text{Equipment depreciation} & \text{\$ 1.600} & \text{\$ 0.40}\\ The weighted average difference between the interest received on assets and the interest rate paid for liabilities for a bank is the banks: 62. Considering the balance sheet for all commercial banks in the U.S., the net worth of banks is: 8. \text{ } & \text{Total Company} & \text{Chicago} & \text{Minneapolis}\\ \text{Direct materials } & \text{\$400,000}\\ \end{matrix} Net profit after taxes per dollar of assets is a basic measure of bank profitability called what? (Hint: Production output in the coming year may be different from production output in the past year.) Apple and Google sell a variety of products. \begin{matrix} \text{Insurance} & \text{\$ 2.900}\\ If a bank increases its assets by adding $1 to capital for every $1 added to assets: 51. A bank would not hold what entity as an insurance against the highest cost of deposit outflow-bank failure? The selling and administrative costs that the company incurs ill a typical month are presented below: The FDIC is crucial to the system because it gives bankers the confidence that a their money is safe regardless of a banks decisions. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. & \text{ } & \text{ } & \text{ }\\ Any reserves beyond what is required are called. The company's sales should average$25 per passenger. Show your calculations. The same bank has $60 for every $100 in liabilities in interest-rate sensitive liabilities, the other $40 are in liabilities that are not interest-rate sensitive. If a bank's return on equity remains constant, but the ratio of bank assets to bank capital decreases: 58. Bank capital is listed on the ____ side of the bank's balance sheet because it represents a ____ of funds. The firm classifies the direct costs of consulting jobs as variable costs. 2. Bank loans from the Federal Reserve are called _____ and represent a ____ of funds. The procedure that estimates the interest-rate sensitivity of a bank's assets and liabilities is called: 87. Why? Prepare a new segmented income statement for the company using the above format. }\ldots\ldots\ldots & \quad & \text{\$300,000}\\ The money multiplier is the inverse of the reserve ratio. Further analysis of manufacturing overhead revealed the following information. Management has identified two cost drivers-the number of cruises and the number of passengers-that it uses in its budgeting and performance reports. 5. from the peak before the financial crisis, leading to small businesses by the largest banks has, small business loans are ____ to securitize than are mortgage loans are are _____ to securitize than are balances on credit cards, community banks are often charge ___ interest rates on businesses loans than do large banks, and the interest rates charged by community banks are usually ___ than the interest rates on credit cards, the bank of bird in hand is a _____ bank which concentrates on making loans to ____, using statistical models to estimate the maximum losses a portfolios value is likely to sustain over a particular time period is called, a financial contract in which a bank agrees to sell the expected future returns from an underlying bank loan to a third party is referred to as, which of the following is a name for when a bank promises to lend funds to a borrower to pay off its commercial paper. Separate the delivery costs into the amounts directly identifiable with each grade. what percentage of bank assets were in security holdings in 2016, what is the largest category of bank assets, about what percentage of bank assets were loans in 2016, the capital contributed by the banks shareholders plus accumulated retained profits, a banks remaining value after it has met all its liabilities is known as, in 2016, net worth was about what percentage of total funds raised by banks. \text{(allocated to each product)} & \text{\$18,650} & \text{\$22,350}\\ Explain. Which of the following bank assets would be categorized as secondary reserves? Banks that actively manage liabilities will most likely meet a reserve shorfall by ______. 1. b. Information related to the just-completed pay period of MegaCom Computer Upgrades is provided in the following chart. \begin{matrix} True or false: bonds of similar risk (and maturity) will be priced to yield about the same return, regardless of the coupon rate. What is the difference between an asset and a liability on a bank's balance sheet? A contribution format segmented income statement for the company's most recent year is given below: " 1. 3. Georgia Orchards produced a good crop of peaches this year. $$ $$ If this were to happen, this would be an example of: 68. \text{Batch setups (setups)} & \text{75.000} & \text{200} & \text{100} & \text{300}\\ In preparing this statement, the company allocated joint costs among the grades on a physical basis as an equal amount per pound. $$ The starter assemblies are currently manufactured in Division 3 of Denver Engineering. $$ Which of the following is a bank liability? The balance of the current fixed overhead, $100,000, is the division managers salary. Do you think delivery costs fit the definition of a joint cost? Banks do not hold a lot of their assets in the form of cash mainly because of: 14. Suppose a particular depository institution that specializes in residential mortgages is owned by its depositors. \text{ } & \text{Deluxe} & \text{Standard}\\ Mergers resulting from the financial crisis of 2007-2009 have left what percentage of deposits in the hands of 4 banks? \end{matrix} \begin{matrix} Why does the Fed require commercial banks to have reserves? Considering a bank's balance sheet, which of the following statements is true? The bank is probably a: 42. From this it can be seen why a bank cannot safely lend more than its excess reserves. Why is this information relevant or irrelevant?$ @ \$1.00/lb . Solve tough problems on your own with the help of expert-verified explanations. Compute the optimal number of batches of each type of cookie that Della Simpson, Inc., should make and sell each day to maximize operating income. Jake's Roof Repair has provided the following data concerning its costs: Be prepared to present your ideas in class. \text{Sales salaries and commissions} & \text{\$ 950 per month, plus 8\\% of sales}\\ Observe from the income statement you have prepared that the contribution margin ratio for Chicago has remained unchanged at 70% (the same as in the above data) but that the segment margin ratio has changed. Contact the local newspaper and ask the approximate cost of ad space (for example, cost of one page or one-half page of advertising) for a companys product or group of products (such as Apple iPads). 4. \text{Direct materials per unit} & \text{\$ 72.00} & \text{\$ 53.00}\\ Which of the following statements regarding checkable deposits is most accurate? If a bank sells off all of its assets and pays all of its liabilities, the amount remaining would be its: 45. \text{No. Which of the following statements best completes this sentence: "On a bank's balance sheet. \end{matrix} A) want the duration of its assets to be greater than the duration of its liabilitiesa positive duration gap. \text{GEORGIA ORCHARDS Income Statement For Year Ended December 31, 2017}\\ 4. The company publishes a schedule of clay cruises that it may supplement with special sailings if there is sufficient demand. \text{Costs}\\ When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to make any loans but to hold excess reserves instead, then, in the banks final balance sheet, Assets and Liabilities increase by $1 million, With a 10% reserve requirement ratio, a $100 deposit into New Bank means that the maximum amount the New Bank could lend is ___, A deposit outflow results in equal reductions in. Limits on the value of the assets that commercial banks can acquire relative to their capital is known as: in managing its liabilities to deal with liquidity problems, banks trade off, the need for available funds to meet deposit outflows against the desire for greater profit, Banks make use of the federal funds market in part to. $$ Because this price is less than the current average cost of$10 per unit, the vice president of manufacturing is eager to accept this offer. A bank that specializes in granting loans to firms in a specific line of business: 79. 1} & \text{No. The company currently manufactures all the parts used in these engines but is considering a proposal from an external supplier who wishes to supply the starter assemblies used in these engines. What are the major assets and claims on a commercial banks balance sheet? \text{Direct labor per unit} & \text{\$ 12.00} & \text{\$ 9.60}\\ 3: 750,000 Ibs. Repurchase agreements are usually used by banks that: 37. The difference between a bank's reserves and its required reserves is: 69. Suppose that the separation process also yields 300 pints of a toxic byproduct. Has the share of checkable deposits in the total bank liabilities over time increased or shrunk? This is: 13. Calculate the gross margin on the sale of the product for human use in March under the constant gross-margin percentage NRV method. Begin by taking the products sales price advertised for each company and assume a 20% contribution margin.
