In May of 2021, Eric Clapton Financial Services became involved in a tax dispute with the IRS. At December 31, 2021, the attorney for Clapton indicated an unfavorable outcome to the dispute was probable. The additional taxes were estimated to be $770,000 but could be as high as $1,170,000. After the year-end, but before the 2021 financial statements were issued, Clapton accepted an IRS settlement offer of $900,000. The accrued liability Clapton should report on its December 31, 2021, balance sheet is:

a) $770,000

b) $900,000

c) $970,000

d) $1,170,000

Roger Daltrey Company, a building materials supplier, has $18,000,000 of notes payable due April 12, 2022. At December 31, 2021, Daltrey signed an agreement with First Bank to borrow up to $18,000,000 to refinance the notes on a long-term basis. The agreement specified that borrowings could not exceed 75% of the value of collateral Daltrey provided. At the date of issue of the December 31, 2021, financial statements, the value of Daltreys collateral was $20,000,000. On its December 31, 2021, balance sheet, Roger Daltrey Company would classify the notes as follows:

a) $15,000,000 in long-term and $3,000,000 in current liabilities.

b) $4,500,000 in long term and $13,500,000 in current liabilities.

c) $18,000,000 of current liabilities.

d) $18,000,000 of long-term liabilities.

Impairment losses are normally reported on the income statement as:

a) A separate component of operating expenses.

b) Part of non-operating expenses.

c) Part of discontinued operations.

d) Part of cost of goods sold.