Use the Following Information for Questions -How Much Tier 1 Capital Does the Bank Have?
A)

question 42

Multiple Choice

Use the following information for questions
$\begin{array}{l|r|l|lr}\text { Bank Assets }&&\text { Bank Liabilities }\\\hline\text { Cash and Treasury Securities } & \$ 2,500 & \text { Deposits } & \$ & 13,800 \\\hline \text { Repurchase Agreements } & \$ 1,000 & \text { Subordinated Debt } & \$ & 250\\\hline \text { Municipal Bonds } & \$ 1,500 & \text { Cumulative Preferred Stock } & \$ & 200 \\\hline \text { Single Family Home Mortgages } & \$ 2,700 & \text { Common Stock } & \$ & 100 \\\hline \text { Commercial Loans } & \$ 4,000 & \text { Common Stock Surplus } & \$ & 300\\\hline\text { Agricultural Loans } & \$ 1,500 & \text { Retained Earnings } & \$ & 350 \\\hline \text { Allowance for Loan Loss } & \$(350) & & &\\\hline \text { Bank Buildings } & \$ 2,000 \\\hline \text { Goodwill } & \$ 150 \\\hline \text { Total } & \$ 15,000&&\$15,000\\\end{array}$
-How much Tier 1 capital does the bank have?

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Definitions:

Activity Cost Pool

A collection of all costs associated with a particular business activity or group of activities.

Resource Consumption

The use of resources, such as time, materials, and labor, in the production of goods or the provision of services.

Overhead Costs

Indirect costs incurred during the production process or in the performance of services, not directly tied to a specific product or service.

Activity Cost Pools

Groupings of individual costs, typically by department or activity, used in activity-based costing to allocate costs to products or services.