Liability comparisons John Bailey invested $50,000 in The Entertainment Company seven years ago. He is concerned about the future of the firm as the profits have plummeted over the last four years. The firm has $120,000 in outstanding debt and is considering declaring bankruptcy.
a. If John is the sole proprietor, describe the financial implication of the firm going bankrupt.
b. If John and his brother, Peter, are partners with an equal partnership distribution, describe the financial implication of the firm going bankrupt.
c. If the firm is a corporation, describe the financial implication of the firm going bankrupt.