Final answer:
A balance sheet lists a company's assets, liabilities, and shareholder's equity. For Singleton Bank, a change in the business plan resulting in $1 million in reserves and a $9 million loan to Hank's Auto Supply would alter the balance sheet, which still shows $10 million in deposits.
Step-by-step explanation:
When discussing a balance sheet for Ricky's piano rebuilding company or Singleton Bank's changes, a balance sheet is a financial statement that lists a company's assets, liabilities, and shareholder's equity at a specific point in time. For Singleton Bank, if it changes its business plan that alters its assets, liabilities, or equity, this would be reflected on the balance sheet. Singleton Bank's assets include $1 million in reserves and a $9 million loan to Hank's Auto Supply, with $10 million in deposits listed as a liability, since the bank owes this to depositors.
When a bank like Singleton Bank issues a loan, this loan is considered an asset on the balance sheet because it is expected to generate interest income. Simultaneously, deposits and reserves at the bank that issued the cashier's check, such as First National, would rise accordingly. The requirement to hold a certain percentage of deposits as reserves (e.g., 10%) is part of the bank's regulatory obligations and affects how much money can be loaned out.