During Year 1, Hardy Merchandising Company purchased $24,000 of inventory on account. Hardy sold inventory on account that cost $18,000 for $27,000. Cash payments on accounts payable were $15,000. There was $24,000 cash collected from accounts receivable. Hardy also paid $4,400 cash for operating expenses. Assume that Hardy started the accounting period with $20,000 in both cash and common stock. Required. Identify the events described in the preceding paragraph and show them in a horizontal statements model. The first event is recorded as an example. b. What is the balance of accounts receivable at the end of Year 1

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.

Which of these is an example of innovation?

Which statement or statements are implied by equilibrium conditions of the loanable funds market? a firm borrowing in the loanable funds market invests those funds with a higher expected return than any firm that is not borrowing. investment projects which use borrowed funds are guaranteed to be profitable even after paying interest expenses. the quantity of savings is maximized, thus the quantity of investment is maximized. a loan is made at the minimum interest rate of all current borrowing.