Question

The August 31 bank statement of Wallace Healthcare has just arrived from Farmington Bank. To prepare the bank reconciliation, you gather the following data:

a. The August 31 bank balance is 6,210.

b. The bank statement includes two charges for NSF checks from customers. One is for430. What is the amount of the other NSF check charge?

Answer 1

To set up a T-account balance sheet for a bank and calculate its net worth, list the bank's assets and liabilities. In the given scenario, the bank's net worth is calculated to be $220, indicating the bank's financial health.

Step-by-step explanation:

The question involves a scenario where a student needs to understand how to set up a T-account balance sheet for a bank and calculate the bank's net worth. Here is how the balance sheet would look:

Assets

• Reserves: $50
• Loans: $500
• Government Bonds: $70

Liabilities

• Deposits: $400

To calculate the net worth, subtract the total liabilities from the total assets. In this case, the bank's net worth would be:

Net Worth = Total Assets - Total Liabilities

= ($50 + $500 + $70) - $400

= $620 - $400

= $220

This calculation demonstrates that the bank has a net worth of $220. Remember that in banking, the term net worth is often referred to as bank's capital, and it is an indicator of the bank's financial health.