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

question 9

Multiple Choice

$\text { Gud Bank: }$

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

Bad Bank buys the bad loans for $232.The proceeds of the loan sale are used by Good Bank to pay off purchased funds.
What will be the total assets of Good Bank after the sale of the loans?

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

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