Chapter 13, Problem 13.12P

1

To determine

Current and Long-Term Liabilities

Liabilities are referred to as the obligations of the business towards the creditors for operating the business. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors. Liabilities are classified in to current liabilities and long-term liabilities. Current liabilities are those liabilities which need to be paid within a year. Long-term liabilities are those liabilities that have longer maturity period.

 To classify: 6.5% bonds among liabilities in the balance sheet.

2

To determine

To classify: 8% bank loan among liabilities in the balance sheet.

3

To determine

To classify: 7% notes among liabilities in the balance sheet.

4

To determine

To report: The lawsuit.

5

To determine

To prepare: Liability (current and long-term liability) section of a classified balance sheet for T at December 31, 2018.

6

To determine

To prepare: The note disclosures for T Airline’s financial statements at December 31, 2018.