REPORTING LIABILITIES Morton Electronics had the following obligations:

a. A legally enforceable claim against the business to be paid in three months.

b. A guarantee given by a seller to a purchaser to repair or replace defective goods during the first six months following a sale.

c. An amount payable to Bank One in 10 years.

d. An amount to be paid next year to Citibank on a long-term note payable.

Required:

Describe how each of these items should be reported in the balance sheet.

Exercise