Ask Question
BusinessBusiness
6 June, 23:38

Suppose you invest $20,000 of your own money in a business as a sole proprietor, and then borrow an additional $10,000 from a bank. Suppose the business fails. Which of the following describes your situation, and what is your total loss?

+5
Answers (1)
  1. 7 June, 02:09
    0
    The correct answer is $30,000.

    Explanation:

    According to the scenario, the given data are as follows:

    Own investment = $20,000

    Debt from bank = $10,000

    As the business is sole proprietor, there is unlimited liability of the loss whether it is own investment or borrowed from a bank.

    So, the total loss can be calculated as:

    Total loss = Own investment + Debt from bank

    = $20,000 + $10,000

    = $30,000

    Hence, the total loss is $30,000.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Suppose you invest $20,000 of your own money in a business as a sole proprietor, and then borrow an additional $10,000 from a bank. Suppose ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
What three factors determine the demand for a product?
Answers (1)
Which of the following is an example of an annuity? A) lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time B) An investment in a certificate of deposit (CD)
Answers (1)
What is the normal journal entry for recording bad debt expense under the allowance method? a) Debit Allowance for Doubtful Accounts, credit Accounts Receivable. b) Debit Bad Debt Expense, credit Allowance for Doubtful Accounts.
Answers (1)
The following budget data are available for Sharp Company: Estimated direct labor hours 12,000 Estimated direct labor dollars $90,000 Estimated factory overhead costs $179,000 Actual direct labor hours 11,500 Actual direct labor dollars $92,000
Answers (1)
Under the Precedence Diagramming Method, the situation which occurs when two activities can start at different times, have different durations, but are planned to be completed at the same time is called:
Answers (2)
New Questions in Business
In economics, what is logrolling?
Answers (1)
In year 1 the CPI is 140, and in year 2 the CPI is 154. From year 1 to year 2, Maria's salary rises from $43,000 to $48,000, and Daisy's salary rises from $65,000 to $70,000. Who is "more than keeping up with inflation"?
Answers (2)
Under a perpetual inventory system: a) purchases on account are debited to Purchases. b) purchase returns are debited to Purchase Returns and Allowances. c) freight costs are debited to Freight-Out. d) purchases on account are debited to Inventory.
Answers (1)
Prepare various types of budgets
Answers (1)
On October 1, 20X3, Green Corporation paid $450,000 for all of Yellow Company's outstanding common stock.
Answers (1)
Home » Business » Suppose you invest $20,000 of your own money in a business as a sole proprietor, and then borrow an additional $10,000 from a bank. Suppose the business fails. Which of the following describes your situation, and what is your total loss?
Sign Up Forgot Password?