Suppose you own a proprietorship that is in serious financial difficulty.The assets of the company are $100,000 but liabilities are $175,000.You also have,however,stock in General Motors worth $200,000.If you file for bankruptcy,what amount of personal assets do you stand to lose?

Question

Quizplus · Accepted Answer

If the proprietorship files for bankruptcy, the personal assets of the owner may come into play. However, the only personal asset mentioned in the question is the stock in General Motors worth $200,000. Therefore, the owner stands to lose the value of the stock ($200,000) minus the liabilities of the proprietorship ($175,000), which is $25,000. Therefore, the best choice is B ($75,000) as the owner only stands to lose the difference between the value of their personal asset and the liability of the company.

Suppose You Own a Proprietorship That Is in Serious Financial