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?