The balance sheet for Springtime National Bank as of yesterday is shown below. Use it to answer the questions that follow. The required reserve ratio is 12%.
|
Asset
|
Liabilities
|
|
Vault Cash
|
405,000
|
Checkable Deposits
|
6,291,000
|
|
Reserves at the Fed
|
500,500
|
Saving Deposits
|
11,900,000
|
|
30 day Treasury Bills
|
5,300,000
|
Long-term Time Deposits
|
10,500,000
|
|
10 year Treasury Bonds
|
6,200,500
|
Discount Loans
|
0
|
|
Mortgages
|
21,500,000
|
Federal Funds loans
|
1,500,000
|
|
Federal Funds loans
|
0
|
Bank Capital
|
3,715,000
|
b. From the original balance sheet, suppose that Springtime had to write down $1,700,000 in mortgage loans due to foreclosures. How would that change their balance sheet?