Here, we are going to prepare the balance sheet of Bank of Marienfield using the information given in the question..
- Formula for Total liabilities is <em>Capital + Checkable deposit + Loan from bank</em>
<u>Given Information</u>
Capital = $150 Million
Checkable deposit = $100 Million
Loan from bank= $50 Million
Total liabilities = $150 Million + $100 Million + $50 Million
Total liabilities = $300 Million
<u>Additional given Information</u>
Commercial loan = $150 Million
Investment in shares = $120 Million
Investment in Treasury bonds = $20 Million
Required reserve = Checkable deposit * Required reserve rate
Required reserve = $100 Million * 10%
Required reserve = $10 Million
Excess reserve = Total liabilities - (Commercial loan + Investment in shares + Investment in Treasury bonds + Required reserve)
Excess reserve = $300 Million - ($150 Million + $120 Million + $20 Million + $10 Million)
Excess reserve = $300 Million - $300 Million
Excess reserve = $0 Million
                                   Balance sheet of Bank of Marienfield.
Assets                           Amount        Liability                        Amount
Required reserves       $10 million     Bank capital              $150 million
Excess Reserve            $0                  Checkable deposit  $100 million
Commercial loan          $150 million   Loan from bank        $50 million
Investment in shares    $120 million
Invest. Treasury bond  <u>$20 million </u>                                      <u>                       </u>
Total                              <u>$300 million</u>  Total                          <u>$300 million</u>