If Kennedy has a net loss of $1,600 cash and then liquidates, what amount of cash will the
creditors receive? What amount of cash will the investors receive?
To determine the amount of cash the creditors and investors will receive after Kennedy's net loss and liquidation, we need more information about the company's assets and liabilities. Specifically, we would need to know the value of the company's assets, the amount of debt owed to creditors, and the amount of investment made by the investors.
However, let's assume the company only has cash as its asset and owes the entire net loss to creditors. In this scenario:
1. Creditors: Since Kennedy has a net loss of $1,600 cash, creditors will receive the entire loss amount. Therefore, the creditors will receive $1,600 cash.
2. Investors: If the investors have made any contribution or invested funds into the company, they may be entitled to a share of the remaining assets. However, in this scenario, if Kennedy has no assets other than cash, the investors will not receive any cash as there are no remaining assets to distribute.
It's important to note that the actual amounts that creditors and investors receive can vary depending on the company's financial situation and its agreements with creditors and investors. To determine the actual amounts, a detailed analysis of the company's financial statements and agreements would be required.