FIN-504 Week 1 hw - Liability Comparisons A Southwest...

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Liability Comparisons A. Southwest Development Company is a sole proprietorship owned by Ms. Harper. Because Southwest Development Company is a sole proprietorship, Ms. Harper is the sole owner and operator for this company. This would make her solely liable for any unpaid debt. In a sole proprietorship business, Ms. Haper can have her personal assets garnished to repay the $60,000 in unpaid debt, under unlimited liability. B. Southwest Development Compnay is a 50-50 partnership of Merideth Harper and Christopher Black. In this scenario, both Harper and Black would equally be responsible for the unpaid debt. Creditors would be able to go after both parties personal assests to repay the unpaid $60,000 debt that is owed. C. Southwest Development Company is a corporation. As a corporation, Ms. Harper would be covered under limited liability. She would not be held responsbile for any unpaid debt because she is only a stockholder. She would end up losing the $25,000 investment she made with the company but is not liable for any additional debt accrued.
Cash Flows A. Determine Jane's total cash inflows and cash outflows.
B. Determine the net cash flow for the month of August.
C. If there is a shortage, what are a few options open to Jane?
D. If there is a surplus, what would be a prudent strategy for her to follow?

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