Listed are selected items from the financial statements of Bachman Manufacturing Company for the year ended December 31, 2021.

Note payable to Williamsburg Bank (due January 30, 2022)	$ 99,000
Income taxes payable	63,000
Loss contingency relating to lawsuit	175,000
Accounts payable and accrued expenses	174,675
Mortgage note payable	240,864
Bonds payable	2,200,000
Premium on bonds payable	10,400
Accrued bond interest payable	110,000
Pension expense	61,400
Unearned revenue	25,300

1. The note payable owed to Williamsburg Bank is due January 30, 2022. Bachman has arranged with this bank to renew the note for an additional two years.

2. Bachman has been sued for $175,000 by someone claiming the company's pumps are excessively noisy. Legal counsel indicates that it is reasonably possible, but not probable, that a loss has been sustained.

3. The mortgage note is payable at $8,000 per month over the next three years. During the next 12 months, the principal amount of this note will be reduced to $169,994.

4. The bonds payable mature in seven months. A sinking fund has been accumulated to repay the full maturity of this bond issue.

Instructions

a. Using this information, prepare the current liabilities and long-term liabilities sections of Bachman's classified balance sheet at December 31, 2021.

b. Explain briefly how the information in each of the four numbered paragraphs affected your presentation of the company's liabilities.