ASSIGNMENT i: Pato 31 of laf pitpox MONEY AND RANKING Write your answers in the space provided below. Refer to the information provided below to answer Question 1. Dank fouth Pacific is in equilibrium with an initial deposit of \( \times 400 \) million, llquid assets of K 100 milition and loans and advances of K 300 million. question 1 A. Draw an initial balance sheet to represent the above information 10 MLARIES \( \qquad \)

Below is one acceptable way to set up the initial balance sheet based on the information given: ┌───────────────────────────────────┐ │ Bank of the Pacific │ │ Initial Balance Sheet │ │ (In Millions of K) │ ┌──────────────┼───────────────────────────────────┤ │ Assets │ Liabilities │ ├──────────────┼───────────────────────────────────┤ │ Liquid Assets: K100 │ Deposits: K400 │ │ Loans & Advances: K300 │ │ │ │ │ │ Total Assets: K100 + K300 = K400 │ Total Liabilities: K400│ └──────────────┴───────────────────────────────────┘ Explanation: 1. The bank’s total assets are the sum of its liquid assets and its loans and advances, which add up to K100 million + K300 million = K400 million. 2. This total matches the initial deposit (and hence liabilities) of K400 million—so the bank is in equilibrium. This balance sheet shows that the assets side equals the liabilities side, meeting the equilibrium condition.