Final answer:
A bank's balance sheet consists of assets, liabilities, and equity. The assets include reserves, bonds, and loans, while the liabilities include deposits and equity. The net worth of the bank can be calculated by subtracting the liabilities from the assets.
Step-by-step explanation:
A bank's balance sheet consists of its assets, liabilities, and equity. The assets include reserves, bonds, and loans, while the liabilities include deposits and equity. To set up a T-account balance sheet for the bank, we can represent the assets and liabilities in separate columns.
Assets:
- Reserves: $30
- Bonds: $50
- Loans: $50
Liabilities:
- Deposits: $300
- Equity: $30
From this balance sheet, we can calculate the net worth or equity of the bank by subtracting the liabilities from the assets.