Final answer:
A bank's total assets can be calculated by setting up a T-account balance sheet. In this example, the bank has deposits of $400, reserves of $50, government bonds worth $70, and loans of $500. The total assets after all transactions have been recorded is $620, and the bank's net worth is $220.
Step-by-step explanation:
A bank's total assets after all transactions have been recorded can be calculated by setting up a T-account balance sheet. In this case, the bank has deposits of $400, reserves of $50, government bonds worth $70, and loans of $500. The T-account balance sheet would look like this:
Assets:
- Cash and reserves: $50
- Loans: $500
- Government bonds: $70
Liabilities:
We can calculate the bank's net worth by subtracting its total liabilities from its total assets:
Total assets = $50 + $500 + $70 = $620
Total liabilities = $400
Net worth = Total assets - Total liabilities = $620 - $400 = $220
Therefore, the amount of total assets after all transactions have been recorded is $620, and the bank's net worth is $220.