Liability comparisonsMerideth 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 ofpayments, ifany, by Merideth in each of the following situations.

a.Southwest Development Company is a sole proprietorship owned by Ms. Harper.

• Ms. Harper has limitedliability, which is the amount of$60,000 in unpaid debts.

• Ms. Harper has unlimitedliability, which means creditors can only claim against the$25,000 she invested.

• Ms. Harper has limitedliability, which guarantees that she cannot lose more than the$25,000 she invested.
• Ms. Harper has unlimitedliability, which means creditors can claim against her personal assets.

b.Southwest Development Company is a50-50 partnership of Merideth Harper and Christopher Black.

• Ms. Harper has unlimitedliability, which means creditors can only claim against the$25,000 she invested.
• Ms. Harper has limitedliability, which guarantees that she cannot lose more than the$25,000 she invested.

• Ms. Harper has limitedliability, which is$30,000, or half of the$60,000 in unpaid debts.

• Ms. Harper has unlimitedliability, which means creditors can claim against her personal assets.

c.Southwest Development Company is a corporation.

• Ms. Harper has unlimitedliability, which means creditors can only claim against the$25,000 she invested.

• Ms. Harper has limitedliability, which guarantees that she cannot lose more than the$25,000 she invested.

• Ms. Harper has unlimitedliability, which means creditors can claim against her personal assets.
• Ms. Harper has limitedliability, which is the amount of$60,000 in unpaid debts.