Suppose you own a proprietorship that is in serious financial ...

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Suppose you own a proprietorship that is in serious financial difficulty. The assets of the company are 100,000 . but liabilities are 175,000 . You also have, however, stock in General Motors worth 200,000 . If you file bankruptcy, what amount of personal assets do you stand to lose?
 a. 100,000
  b. 75,000
  c. 200,000
  d. 275,000
  e. 375,000

Question 2

Brian is the sole proprietor owner of Long Voyage Software, which generates maps for wilderness trips. He started the business with an initial investment of 80,000 . A faulty map caused one customer to get hopelessly lost. After her rescue and recuperation, she sued Long Voyage for 5,000,000 . Which of the following is true?
 a. The customer can be awarded only 80,000--what the firm has available to pay.
  b. The customer can be awarded 5,000,000 but can get only 80,000.
  c. The customer can be awarded 5,000,000 . but Brian personally won't have to pay more than 80,000.
  d. If 5,000,000 is awarded, Brian will have to pay none of it.
  e. If 5,000,000 is awarded, Brian is personally responsible for paying all of it.

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Answer to Question 1

B

Answer to Question 2

E

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