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What is the amount of liability of Sea Green Enterprises

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Problem - Sea Green Enterprises reports the following assets and liabilities on its balance sheet.

 

Net Book Value

Fair Market Value

Assets

$600,000

$925,000

Liabilities

200,000

200,000

Sea Green has just lost a product liability lawsuit, with damages of $10,000,000 being awarded to the plaintiff. Although Sea Green will appeal the judgment, legal counsel indicates that the judgment is highly unlikely to be overturned by the appellate court. The product liability insurance carried by Sea Green has a policy ceiling of $6,000,000. What is the amount of liability of Sea Green Enterprises and its owners if the form of the business entity is:

a. A sole proprietorship?

b. A partnership?

c. A C corporation?

d. An S corporation?

Reference no: EM132657610

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