B1 Western Bank has the following entries on its balance sheet (expressed in Sbillion). ESF 12 Accumulated retained profit 200 630 752 14 150 16 Certificates of Deposits on issue Loans to households Capital notes on issue Demand deposits of customers Shares on issue Provisions for bad and doubtful debt for loans to households Loans to another bank Capital Reserve Shares investment (trading) Government securities (available for sale) 4 200 20 40 30 a) O Build Western Bank's balance sheet incorporating all the above items. (Incorporate all the items in one single balance sheet. Identify clearly the balance sheet item name and the value] (3 marks) (W) Identify the components of Western Bank's regulatory total capital and calculate Western Bank's regulatory total capital. (2 marks) b) Starting from the situation described in a) consider the following operations: (1) The market value of the shares held by Western Bank for trading purposes decreases by S6 billion. (2) The market value of the government bonds held by Western Bank for liquidity purposes increases by S4 billion. (3) Western Bank writes off $10 billion of loans made to households, and has access to the lending provisions from a). (4) Western Bank receives $15 billion coupons from governments that do NOT have an account in the bank. (5) Western Bank buys company cars for $0.1 billion from a dealer that is a customer of the bank. 0 Using one new balance sheet (separate from the one in a), represent the effect of the 5 operations above on the balance sheet of Western Bank. [Only represent variations not new levels. Identify clearly the balance sheet item name, the variation sign and the value. Indicate the numbering of the transaction at the end of each entry. You are allowed to add new entry names if you need them (5 marks) () Refer to the income expense (financial performance) statement detailed structure used in the course (entry 1 to 10 in slides 4-6 in Edge section 7.2). Represent the effect of the 5 operations above on the 10 entries of the income expense statement. Calculate the net effect on the profit from ordinary activities before tax. (5 marks) B1 Western Bank has the following entries on its balance sheet (expressed in Sbillion). ESF 12 Accumulated retained profit 200 630 752 14 150 16 Certificates of Deposits on issue Loans to households Capital notes on issue Demand deposits of customers Shares on issue Provisions for bad and doubtful debt for loans to households Loans to another bank Capital Reserve Shares investment (trading) Government securities (available for sale) 4 200 20 40 30 a) O Build Western Bank's balance sheet incorporating all the above items. (Incorporate all the items in one single balance sheet. Identify clearly the balance sheet item name and the value] (3 marks) (W) Identify the components of Western Bank's regulatory total capital and calculate Western Bank's regulatory total capital. (2 marks) b) Starting from the situation described in a) consider the following operations: (1) The market value of the shares held by Western Bank for trading purposes decreases by S6 billion. (2) The market value of the government bonds held by Western Bank for liquidity purposes increases by S4 billion. (3) Western Bank writes off $10 billion of loans made to households, and has access to the lending provisions from a). (4) Western Bank receives $15 billion coupons from governments that do NOT have an account in the bank. (5) Western Bank buys company cars for $0.1 billion from a dealer that is a customer of the bank. 0 Using one new balance sheet (separate from the one in a), represent the effect of the 5 operations above on the balance sheet of Western Bank. [Only represent variations not new levels. Identify clearly the balance sheet item name, the variation sign and the value. Indicate the numbering of the transaction at the end of each entry. You are allowed to add new entry names if you need them (5 marks) () Refer to the income expense (financial performance) statement detailed structure used in the course (entry 1 to 10 in slides 4-6 in Edge section 7.2). Represent the effect of the 5 operations above on the 10 entries of the income expense statement. Calculate the net effect on the profit from ordinary activities before tax
