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For each of the situations that follow, determine whether aliability should be reported on the balance sheet. If aliability should be reported, suggest an account name and indicatewhether it should be reported as a current liability or as a longtern liability. If no liability should be reported, indicatewhy.
a. The last installment payment on a three year notepayable is due next month.b. Specialized production machinery has been acquiredunder a capital lease.c. A 14 million lawsuit has been filed by a customer whoclaims injury from one of the company's products.d. The labor services of employees have been consumedbut not paid for yet. Payment is not anticipated until thenext regular payday in two weeks.e. A 20 year issue of bonds has been outstanding for 19years and is expected to be repaid in cash at its maturitydate.f. The company has signed a contract promising to buy600,000 worth of merchandise during the coming year.
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