Introduction to Finance

b. 
If total assets were $12 million, what would be the amount of the 
loans?
c. 
If total assets were $11 million, and $1 million of securities were 
sold with the proceeds placed in the cash account, what would be 
the amount of the loans?
4. 
ATM Banc has the following liabilities and equity categories:
Deposits $9 
million
Other liabilities 
$4 million
Stockholders’ equity 
?
Total liabilities and stockholders’ equity 
?
a. 
What would be the bank’s total liabilities and stockholders’ equity 
if stockholders’ equity were one-half the size of other liabilities?
b. 
If total liabilities and stockholders’ equity capital were $15.5 
million, what would be the amount of the stockholders’ equity?
c. 
If total liabilities and stockholders’ equity were $14 million, and 
$1 million of deposits were withdrawn from the bank, what would 
be the amount of the stockholders’ equity?
5. 
Following are selected balance sheet accounts for Third State Bank: 
vault cash = $2 million, U.S. government securities = $5 million, 
demand deposits = $13 million, nontransactional accounts = $20 mil-
lion, cash items in process of collection = $4 million, loans to indi-
viduals = $7 million, loans secured by real estate = $9 million, federal 
funds purchased = $4 million, and bank premises = $11 million.
a. 
From these accounts, select only the asset accounts and calculate 
the bank’s total assets.
b. 
Calculate the total liabilities for Third State Bank.
c. 
Based on the totals for assets and liabilities, determine the 
amount in the stockholders’ equity account.
6. 
A bank’s assets consist of the following:
Cash
$1.5 million
Loans $10 
million
Securities $4.5 
million
Fixed assets 
$2 million
In addition, the bank’s common equity is $1.5 million.