1. Irkalla Co. has the following liabilities at December 31, 2014:

Accounts payable-trade	$200,000
Short-term borrowings	100,000
Bank loan, current portion $100,000	2,000,000
Other bank loan, matures June 30, 20X5	1,000,000

The bank loan of $2,000,000 requires Irkalla to maintain certain financial ratios but Irkalla has not been able to do so and is in violation of the loan agreement. The creditor has not waived its rights in regard to the loan. What amount should Irkalla report as current liabilities at December 31, 2014?

a. $1,400,000

b. $3,100,000

c. $3,300,000

d. $1,200,000

2. Management can estimate the amount of loss that will occur if the company does not prevail in a currently contested lawsuit. If losing the suit is reasonably possible, which of the following describes how the entity may report the loss contingency in the financial statements?

Balance Sheet

Notes to Financial Statements

a. Accrued as liability Not disclosed

b. Not accrued Not disclosed

c. Not accrued Disclosed

d. Accrued as liability Disclosed