Question

An asset that has a cost of $100,000 and accumulated depreciation of $40,000 what portion of its usefulness has been used?

Answer 1

The bank's assets, including reserves, loans, and bonds, total $620. The liability, which is the deposits, is $400. Subtracting liabilities from assets, the bank's net worth is calculated to be $220.

Step-by-step explanation:

The question from the student involves setting up a T-account balance sheet and calculating the bank's net worth. First, we need to record the assets and liabilities.

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

These will be our total assets which equal $620.

• Deposits: $400

These are the total liabilities. To obtain the bank's net worth, we subtract the total liabilities from the total assets.

Bank's Net Worth = Total Assets - Total Liabilities

Bank's Net Worth = $620 - $400 = $220

Therefore, the bank's net worth is $220.