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Memoranda.

Contingent Liability on discounted bills receivable

Land is a leasehold interest, the amount stated above having been

paid on account of purchase price.

Management: Men experienced and capable.

.$41,650.00

Considered honest. Say they

are doing a fairly large business but with relatively small profit.

Wish to renew their notes.

What is your decision?

Proposition.

9. How does kiting differ from the bank's ordinary business?

IO. In what ways is bank credit like commercial credit, and in what ways is it different?

II. Assume you are an honest business man. What can you do to have a good credit statement? If you are dishonest, what would be your probable course?

12. On the basis of the following statements, how large a

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Notes payable: $40,000 to banks; $15,350 to a subsidiary concern.
Deposits: From stockholders.

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Officers: Thoroughly honest, capable, and industrious; experienced in their line. Merchandise at market price, principally stable goods.

Accounts Receivable: Very good and not old.

Notes Payable {$7,500 to bank.

12,500 to stockholders.

Accounts Payable: Most bills not due; usually discount.
Business: $150,000 per annum.

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On the basis of the comparative balance sheets from 1913 to 1921, what would be your judgment of:

(a) The efficiency of the sales department?
(b) The efficiency of the collection department?
(c) The policy with respect to depreciation?
(d) The soundness of the dividend policy?

How much would you be willing to lend them at one time?

CHAPTER V.

DEPOSITS AND LOANS.

Bank Deposits, Classes of.

1. Special-Bank acts as a warehouse and returns the identical thing.

2. General-Bank obligates itself to pay money in the form

of legal tender.

a. Demand.

b. Time.

Origin of Bank Deposits.

I. Money and cash terms.

2. Borrowing.

Sources of Bank Deposits.

1. Bank deposits in other banks.

a. Reserve accounts.

b.

C.

Collection accounts.

To sell exchange.

2. Public deposits.

a. United States-secured by deposit of bonds.
b. Postal Savings.

C. State, county, city, or school district-often let by
competitive bidding.

3. Individual deposits.

a. Commercial.

b. Professional or private.

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