Final answer:
Singleton Bank's balance sheet changed due to a new business plan, now including loans and reserves as assets, and maintaining deposits as liabilities. A T-account is used to represent the bank's financial position, where $9 million in loans and $1 million in reserves are on the assets side and $10 million in deposits are on the liabilities side.
Step-by-step explanation:
The subject matter in question pertains to the adjustments in a bank's balance sheet due to a change in the business plan affecting its assets, liabilities, and net worth. A balance sheet is a financial statement that lists a company's assets and liabilities, providing a snapshot of its financial condition at a given point in time. The scenario describes Singleton Bank, which now has $9 million in loans to Hank's Auto Supply, along with $1 million in reserves, while maintaining $10 million in deposits.
The 'T' in a T-account represents a method used to depict this financial information, showing assets on one side and liabilities plus net worth on the other. For the Singleton Bank case, the change in the business plan likely involves starting to make loans, which can earn interest income, a shift from merely storing depositors' money. This now places reserves and loans on the assets side of the T-account, while the deposits remain a liability. The bank's net worth would be the difference between total assets and liabilities.