P1-1 Liability comparisons Merideth Harper has invested $25,000 in Southwest Development Company. The firm has recently...

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P1-1 Liability comparisons Merideth Harper has invested $25,000 in Southwest Development Company. The firm has recently decla

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a. If it is a sole proprietorship Ms. Harper is liable for all liabilities and owner of all the profits earned by the firm. So, the money will be used in paying the debts of the company.

b.The money invested by harper will be used to pay the debts because she is also a partner in the firm so it becomes her liability.

c. Ms. Hyper will buy the shares of southwest as it is a corporation which gives her ownership in the same. As merideth contribute 60000 in the corporation it will help it to pay off the debts.

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Answer 2

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