Assume that Clayton Company acquires $1,200 cash from creditors and $1,700 cash from investors.

Required

a. Explain the primary differences between investors and creditors.

b. If Clayton has net income of $800 and then liquidates, what amount of cash will the creditors receive? What amount of cash will the investors receive?

c. If Clayton has a net loss of $800 cash and then liquidates, what amount of cash will the creditors receive? What amount of cash will the investors receive?

d. If Clayton has a net loss of $1,900 cash and then liquidates, what amount of cash will the creditors receive? What amount of cash will the investors receive?