FIN504.D.CooperCh01.02.xlsx - a Sole proprietorship In case...

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a. Sole proprietorship: In case of sole proprietorship, the liability of proprietor is unlimited. So, Merideth will be liable to pa excess debt of $35,000 from her personal properties. b. 50-50 partnership: In case of 50-50 partnership with Ms.Harper and Christopher Black, the liabilities of partners are unli As this is not the case of partnership with limited liability, so Merideth will be liable to the outstanding debts of $35K from personal properties. c. Corporation: In case of corporation, the liabilities of stockholders are limited only to the extent of their investment. So Merideth will be liable to the debt holders only to the extent of $25K. The rest of the amount of debts ($35K) cannot be recovered from her personal assets.
a. Total cash inflows and cash outflows: The sum of the cash inflows column will give the total cash inflows. Total Cash Inflows = Interest received + Salary Total Cash Inflows = $450 + $4500 = $4,950 Janes total cash inflows are $4,950 Total outflows are the sum of all the values in the Cash outflows column. Total Cash Outflows = Clothes + Dining out + Groceries + Auto payment + utilities + Mortgage + Gas Total Cash Outflows = $1000 + $500 + $800 + $355 + 280 + $1200 + $222 = $4357 Janes total cash outflows are $4357 b. Net Cash Flow: Net cash flow is the difference between cash inflows and outflows. It can be represented as follows: Net cash flow = Cash inflows - Cash outflows Substitute the values in the formula: Net cash flow = $4950 - $4357 = $593 Net cash flow is $593 c. Shortage: In case of shortage, Jane can borrow money from the bank at the interest rate of 6% d. Surplus:

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