Assets Liabilities and Net Worth Reserves $40,000 Checkable Deposits $130,000
Loans 25,000 Stock Shares 45,000
Securities 110,000
Assume the Continental National Bank's balance statement is as shown in the accompanying table. Assuming a legal reserve ratio of 20 percent, how much in excess reserves would this bank have after a check for $10,000 was drawn and cleared against it?
a. $16,000.
b. $3,000.
c. $6,000.
d. $24,000.

c. $6,000.

Explanation:

Given: Checkable Deposits = $130,000

Amount  Withdrawal =  $10,000

Then, the new checkable deposit = (Checkable Deposits) - (Amount  Withdrawal)

= $130,000-$10,000= $120,000

Reserves =  20%  × (new checkable deposit)

=20%  × $120,000 = $24,000

New reserve = (Reserve)-(Amount  Withdrawal)

=$40,000 - $10,000 = $30,000

Excess Reserve = (New reserve) - (Reserves )

= $30,000 – $24,000 = $6,000

i.e. Excess reserve in bank is $6,000.

Hence, the correct answer is c. $6,000.

d) social security number

let me know if i am correct or not, so i can edit the answer.

answer; post closing trial balance;