Final answer:
The questions deal with Business accounting concepts for a bank. First, it calculates new accounting figures after a land purchase by a company. Next, it describes setting up a T-account for a bank and its net worth. Finally, it explores balance sheet changes due to Federal Reserve open market operations.
Step-by-step explanation:
The subject of these questions is Business, specifically relating to the accounting and finance practices of banks. These questions pertain to the creation of bank balance sheets and the effects of the Federal Reserve's open market operations on a bank's balance sheet.
For the initial company mentioned, the ending period amounts for the accounting equation after purchasing land by issuing a note payable would be: Assets = $394,000 (initial $357,000 plus new land purchase of $37,000), Liabilities = $154,000 (initial $117,000 plus new note payable of $37,000), and Equity would remain unchanged at $240,000, because the purchase of land with a note payable affects only assets and liabilities.
For the bank described, a T-account balance sheet after its transactions would look like this:
- Assets: Reserves = $50, Bonds = $70, Loans = $500
- Liabilities: Deposits = $400
- Equity (Net Worth) = Assets - Liabilities = $620 - $400 = $220
Regarding the impact of the Federal Reserve's open market purchase from Acme Bank, their balance sheet would be adjusted by increasing reserves (due to cash received from bond sale) and increasing loans with the new available cash. The purchase of $10 million in Treasury bonds significantly increases reserves and allows the bank to extend new loans with these additional funds.