Examlex
Consider the balance sheets of Bank A and Bank B.Bank A is in London,Bank B is in New York.The current exchange rate is £1.00 = $2.00.Show the correct balances in each account if a currency trader employed at Bank A buys £45,000 from a currency trader at Bank B for $90,000 using its correspondent relationship with Bank B.
Bank A (London) 000s
Assets | Liabilities and Equity | |||||
---|---|---|---|---|---|---|
OLD | NEW | OLD | NEW | |||
£ deposit at B | £500 | B's Eurodollar deposit | $850 | |||
$ deposit at B | $ 1,000 | B's € deposit | £100 | |||
Cash in the Vault | £200 | Other Liabilities | £300 | |||
Other Assets | £400 | Owners Equity | £775 | |||
----- | ------ | ------- | ------- | |||
Total Assets | £1,600 | Total Liabilities & Equity | £1,600 |
Assets | Liabilities and Equity | |||||
---|---|---|---|---|---|---|
OLD | NEW | OLD | NEW | |||
Eurodollar Deposit at A | $850 | B's Eurodollar deposit | £500 | |||
£ deposit at A | £100 | B's € deposit | $1,000 | |||
Cash in the Vault | $200 | Other Liabilities | $200 | |||
Other Assets | $1,00 | Owners Equity | $50 | |||
----- | ------ | ------- | ------- | |||
Total Assets | £2,250 | Total Liabilities & Equity | £2,250 |
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