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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.