Exploring Balance Sheets

2. In an earlier explore page, you worked a simple problem with a balance sheet. Here is a similar problem.

Jane Doe finds that she needs more cash. She goes to her bank and withdraws $400 from her savings account and gets a loan for another $400. As a result she now has $800 more in currency, $400 less in her savings account, and owes the bank $400. Show the changes this transaction has on her bank's balance sheet:

Jane's Bank

Liabilities and Net Worth

Vault Cash $


Checking Accounts $

Deposits at the Fed. Res $

Savings Accounts $

Loans $

Other Liabilities $

Securities $

Net Worth $

Other $

What happened to the legal reserves in the banking system as a result of Miss Doe's withdrawal of cash?

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