Martha started a flower shop as a sole proprietor. After 1 year, she was forced to close the shop because business was so bad. At that time, the business assets totaled $50,000, but the business liabilities totaled $125,000. Which of the following statements is true?
a. Martha is personally liable for the additional $75,000.
b. Martha’s business creditors can collect only the $50,000 of business assets.
c. Martha’s business creditors can collect only the $50,000 now, but if Martha ever goes into business again, they can get the assets of the new business.
d. Once Martha terminates the sole proprietorship, the business creditors cannot even get the $50,000.
