Final answer:
The question concerns changes to Singleton Bank's balance sheet due to a new business plan. It entails calculating the bank's net worth by setting up a T-account balance sheet, which lists the bank's assets and liabilities. The changes include $1 million in reserves, a $9 million loan to Hank's Auto Supply, and $10 million in deposits.
Step-by-step explanation:
Understanding Balance Sheets in Business
The question provided relates to the interpretation and alteration of a balance sheet in a business context. Typically, a balance sheet reflects a company's financial position at a particular point in time, showcasing its assets, liabilities, and shareholder's equity. As mentioned, Singleton Bank's balance sheet has undergone changes due to a shift in business plan. The bank's assets now include $1 million in reserves and a $9 million loan to Hank's Auto Supply, while its liabilities show that it continues to have $10 million in deposits.
To set up a T-account balance sheet for a bank with given figures, one side will have assets including reserves, loans, and bonds, while the other side has liabilities such as deposits and equity. The net worth or equity is calculated by subtracting total liabilities from total assets.
For example, if a bank has deposits of $400, reserves of $50, purchased government bonds worth $70, and made loans of $500, the assets will total $620 ($50 + $70 + $500), and the liabilities are $400 (deposits). The net worth is therefore $220 ($620 in assets - $400 in liabilities).
The complete question is: Lanson Corporation Company's trial balance included the following account balances on December 31, 2024: is: