Math

Liability comparisons  Merideth Harper has invested​ $25,000 in Southwest Development Company. The firm has recently declared bankruptcy and has​$60,000 in unpaid debts. Explain the nature of​ payments, if​ any, by Ms. Harper in each of the following situations.

a. Southwest Development Company is a sole proprietorship owned by Ms. Harper.

b. Southwest Development Company is a​ 50-50 partnership of Ms. Harper and Christopher Black.

c. Southwest Development Company is a corporation.

a. If Southwest Development Company is a sole proprietorship owned by Ms.​ Harper,: ​(Select the best answer​ below.)

A.

Ms. Harper has unlimited​ liability, which means creditors can only claim against the​ $25,000 she invested.

B.

Ms. Harper has unlimited​ liability, which means creditors can claim against her personal assets.

C.

Ms. Harper has limited​ liability, which guarantees that she cannot lose more than the​ $25,000 she invested.

D.

Ms. Harper has limited​ liability, which is the amount of​ $60,000 in unpaid debts.