a. If Northeast Productions Company is a sole proprietorship owned by Ms. Smith,: (Select the best answer below.) A. Ms. Smith has unlimited liability, which means creditors can only claim against the $25,000 she invested. B. Ms. Smith has unlimited liability, which means creditors can claim against her personal assets. C. Ms. Smith has limited liability, which is the amount of $60,000 in unpaid debts. OD. Ms. Smith has limited liability, which guarantees that she cannot lose more than the $25,000 she invested.
a. If Northeast Productions Company is a sole proprietorship owned by Ms. Smith,: (Select the best answer below.) A. Ms. Smith has unlimited liability, which means creditors can only claim against the $25,000 she invested. B. Ms. Smith has unlimited liability, which means creditors can claim against her personal assets. C. Ms. Smith has limited liability, which is the amount of $60,000 in unpaid debts. OD. Ms. Smith has limited liability, which guarantees that she cannot lose more than the $25,000 she invested.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question 23, P1-1 (similar to)
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Liability comparisons Nerissa Smith has invested $25,000 in Northeast Productions Company. The firm has recently declared bankruptcy and has $60,000 in unpaid debts. Explain the nature of Nerissa's personal liabilit , if any, in each of the following situations.
a. Northeast Productions Company is a sole proprietorship owned by Ms. Smith.
b. Northeast Productions Company is a 50-50 general partnership of Nerissa Smith and Roger Brown.
c. Northeast Productions Company is a limited partnership where Nerissa Smith is a limited partner.
d. Northeast Productions Company is a corporation.
a. If Northeast Productions Company is a sole proprietorship owned by Ms. Smith,: (Select the best answer below.)
O A. Ms. Smith has unlimited liability, which means creditors can only claim against the $25,000 she invested.
O B. Ms. Smith has unlimited liability, which means creditors can claim against her personal assets.
O C. Ms. Smith has limited liability, which is the amount of $60,000 in unpaid debts.
D. Ms. Smith has limited liability, which guarantees that she cannot lose more than the $25,000 she invested.
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