Interpreting Financial Statements: Interpreting a Bank’s Financial Statements C3. Mellon Bank is…

Interpreting Financial Statements: Interpreting a Bank’s Financial Statements

C3. Mellon Bank is a large bank holding company. Selected accounts from the company’s 2011 annual report are as follows (in millions):8

 

Cash and Due from Banks

$    4,175

Loans to Customers

43,585

Securities Available for Sale

78,467

Deposits by Customers

219,094

1.    Indicate whether each of these accounts is an asset, a liability, or a component of stockholders’ equity on Mellon Bank’s balance sheet.

2.    Assume that you are in a position to do business with Mellon. Show how Mellon Bank’s accountants would prepare the entry in T account form to record each of the following transactions:

a.    You sell securities in the amount of $2,000 to the bank.

b.    You deposit in the bank the $2,000 received from selling the securities.

c.    You borrow $5,000 from the bank.

 

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