$\text { Gud Bank: }$ Bad Bank Buys the Bad Loans for $232

$\text { Gud Bank: }$

$\begin{array}{l}\begin{array}{lll}\text { Cash } & & \$ 200 \\ \text { Goodloans } & & \$ 1,000 \\ \text { Bad Loans } & & \$ 380 \\ \text { Total } & & \$ 1,580 \\ &\text { Bad Bank: } & \\ \text { Cash } & & \$ 240\\\text { Loans } & & 0 \\ \\\text { Total} & & \$ 240 \\\end{array}\begin{array}{lll}\text { Deposits} &\$ 1,000 \\ \text { Puychased funds} &\$ 300 \\ \text { Equity} &\$ 280 \\ & \$ 1,580 \\\\\text { Bonds} & \$ 120\\ \text { Preferred stock} &\$ 40 \\ \text { Common stock} &\$ 80 \\ & \$ 240 \end{array}\end{array}$

Bad Bank buys the bad loans for $232.The proceeds of the loan sale are used by Good Bank to pay off purchased funds.
If the proceeds of the loan sale are used to pay off purchased funds,what will be the balance of the purchased funds for Good Bank after the transaction?

A) $1,200.
B) $232.
C) $132.
D) $68.

Correct Answer:

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