25-87 What Will Be the Amount of Equity on the Balance

question 42

Multiple Choice

25-87 What will be the amount of equity on the balance sheet of Good Bank after the sale of the loans?

• A)$1,200.
• B)$232.
• C)$132.
• D)$68.
• E)$0.

Identify the requirements for valid acceptance and the effects of various acceptance methods.

Comprehend the factors affecting the enforceability of agreements not in writing.

Analyze the role and characteristics of formal contracts such as contracts under seal and letters of credit.

Explain the mirror-image rule and the mailbox rule in the context of agreement formation.

---

Definitions:

Relevant Range

The span of activity level within which the assumptions about variable and fixed cost behaviors hold true.

High-low Method

A technique used in managerial accounting to estimate fixed and variable costs by analyzing the highest and lowest levels of activity and the associated costs.

Variable Cost

A cost that varies directly with the level of production or volume, such as materials and labor directly involved in the production process.

Least-squares Method

A statistical technique used to determine the line of best fit by minimizing the sum of the squares of the differences between observed and estimated values.