Question

Wells Fargo & Company, headquartered in San Francisco, is one of the nation’s largest financial institutions. Suppose it reported the following selected accounts (in millions) as of December 31, 2017.

Retained earnings $41,563
Preferred stock 8,485
Common stock—$12/3 par value, authorized 6,000,000,000 shares; issued 5,245,971,422 shares 8,743
Treasury stock—67,346,829 common shares (2,450)
Paid-in capital in excess of par value—common stock 52,878

Required:
Prepare the stockholders’ equity section of the balance sheet for Wells Fargo as of December 31, 2017

Answer 1

To set up the T-account balance sheet for the bank and calculate its net worth, list the assets, liabilities, and subtract the liabilities from the assets.

Step-by-step explanation:

In order to set up the T-account balance sheet for the bank, you need to list the assets and liabilities.

The bank's assets include reserves of $50, government bonds worth $70, and loans of $500.

The bank's liabilities include deposits of $400.

To calculate the bank's net worth, you subtract the liabilities from the assets. In this case, the bank's net worth is $220.