Eli draws a check for $1,500 on Town Bank. The check is made payable to the order of Carmen. Carmen endorses and sells the check to Nita. At Nita's request, Town Bank certifies the check. In this scenario, which of the following is a true statement?
A. Eli becomes secondarily liable on the check.
B. Carmen becomes secondarily liable on the check.
C. Town Bank becomes primarily liable on the check.
D. Eli becomes primarily liable on the check.
Answer: C
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[APPENDIX] Tarr, a sole proprietorship, had the following balances and transactions during 2016: beginning capital, $40,000; contribution of cash to the business by the owner, $15,000; revenue, $60,000; expenses, $35,000; withdrawal by the owner, $5,000 . What is the amount of the ending capital balance?
a. $40,000 b. $60,000 c. $75,000 d. $85,000
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