Em Kolors Limited, a publishing house in Ghana offered designing and printing services to Bedsam Consult in 2012 during the first decade celebrations. However, the invoice totaling GHS100,000 submitted has to date not been paid. BedSam has contested the invoice resulting in Em Kolors pursuing the case in court and judgment is expected before the year ends. Em Kolors accountant has recognized this figure has an account receivable since 2012.

Advice each company on the following matters: i. State the type of financial statement item facing the company ii. What liability should be recognized and how much for the year ending 2014? iii. How should the item be treated in the 2014 financial statements?