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Your uncle repays a $350 loan from Tenth National Bank (TNB) by writing a $350 check from his TNB checking account. Assume these funds are the only loans and deposits available for your uncle and the bank.
a. Complete the following T-accounts for your uncle and TNB before your uncle repays the loan.
O Your Uncle
Assets _____ Liabilities _______
O Tenth National Bank
Assets _____ Liabilities _______
b. Complete the following T-accounts for your uncle and TNB after your uncle repays the loan.O Your Uncle
Assets _____ Liabilities _______
O Tenth National Bank
Assets _____ Liabilities _______
c. Your uncle’s wealth has changed.
O True
O False

Respuesta :

Answer:

The Preparation of given question is given below:-

Explanation:

a. Before the loan is paid

The T-account of uncle is below:-

Assets                      Amount             Liabilities           Amount

Checking account   $350                   Loans                  $350

The T-account of Tenth National Bank

Assets                      Amount             Liabilities           Amount

Loans                       $350                  Deposits             $350

b. After the loan is paid

The T-account of uncle is below:-

Assets                      Amount             Liabilities           Amount

Checking account   $0                      Loans                  $0

The T-account of Tenth National Bank

Assets                      Amount             Liabilities           Amount

Loans                       $0                       Deposits             $0

Before the loan is paid the Uncle wealth = Assets - Liabilities

= $350 - $350

= $0

After the loan is paid the Uncle wealth = Assets - Liabilities

= $0 - $0

= $0

Therefore the uncle's wealth has not changed

So, the given statement is False.

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