Suppose that Mid-Size National Bank has the balance sheet in Table 1. One day, a hurricane destroys 20 percent of its property and buildings, and its insurance covers only half this amount. Illustrate (with new entries) how its balance sheet will change.

Transcribed Image Text:

Liabilities and Shareholders' Equity Assets $ 600 million 40 million Property and Buildings Checking Account Deposits $ 100 million $ 200 million Other Deposits Government and Corporate Bonds $ 75 million $ 800 million $ 10 million $ 50 million Bank Borrowing Loans Cash in Vault and ATMS In Accounts with Federal $ 125 million Shareholders' Equity Reserve Total Assets $1,000 million Total Liabilities $1,000 million and Shareholders' Equity