1.Which of the following would be considered an extraordinary item on an income statement of a bank? A. Realized

Question

1.Which of the following would be considered an extraordinary item on an income statement of a bank? A. Realized security gains. B. Interest income when the spread is greater than 10%. OC. Revenue from the sale of the bank's office building. D. Collection on loans already charged off. E. All of the above would be considered extraordinary items. & 2.Use the information for the question(s) below. Assume that today is your 31st birthday and that you are planning on retirement at age 60. Your current salary is $65,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account on every birthday up to and including your 60th birthday. Your first contribution will be made today (on your 31st birthday) and will be 7% of your current salary. Likewise, you expect to deposit 7% of your salary each year until you reach age 60. Assume that the rate of interest is 9% APR with

Help In Homework · Accepted Answer

1.Option C is the correct amswer Revenue from the sale of the bank's office building Extraordinary items are unusual and it will not happening in common. These are occuring in abnormal it is not relate to the normal activities of a company / bank It will have positive effect on the net income of a bank. It will be added on net operating income to get net income of bank 2. First Annual deposit, A= 7%*65000=$4550 g=5% r=9% n=30 FV= A*((1+r)^n-(1+g)^n)/(r-g) =4550*((1+9%)^30-(1+5%)^30)/(9%-5%) =4550*(1.09^30-1.05^30)/4% =4550*(13.2677-4.3129)/0.04 =4550*8.9457/0.04 =1017577.48 Hence 4th option is correct

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