Assume that Harris Company acquires 3 600 cash from creditors and
Assume that Harris Company acquires $3,600 cash from creditors and $4,200 cash from investors.
Required
a. Explain the primary differences between investors and creditors.
b. If Harris has net income of $2,000 and then liquidates, what amount of cash will the creditors receive? What amount of cash will the investors receive?
c. If Harris has a net loss of $2,000 cash and then liquidates, what amount of cash will the creditors receive? What amount of cash will the investors receive?
d. If Harris has a net loss of $4,900 cash and then liquidates, what amount of cash will the creditors receive? What amount of cash will the investors receive?
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