1) Julia makes $45,000 per year at her full-time job. In her spare time, she runs a blog, Gardening by Julia, as a sole proprietorship where she earns an additional $5,000 per year. Which of the following accurately explains the tax situation?

a)	Gardening by Julia will pay taxes on $50,000 per year

b)	Julia will pay taxes on $45,000, and Gardening by Julia will pay taxes on $5,000 per year

c)	Julia will pay taxes on $50,000 per year

d)	None of these. Sole proprietorships are not taxed.

2) Phyllis is a partner in a general partnership. Phyllis is owed $1000 in partnership profits, but Phyllis owes Cate, a creditor, $1000 for personal debts. Cate may do which of the following?

a)	Cate may sue the partnership to replace Phyllis as a partner

b)	Cate may sue to the other partners for Phyllis's personal debts

c)	Cate may seize Phyllis's rights to the $1000 in distribution of profits.

d)	All of these.

3) Sarah owns an advertising agency as sole proprietorship. If Sarah allows Ivan, an investor, to buy an ownership stake in her advertising agency, then, which of the following is likely true?

a)	Sarah has transferred her sole proprietorship to Ivan.

b)	Sarah and Ivan each own a separate sole proprietorship.

c)	Sarah and Ivan have formed a partnership.

d)	None of these.