n.29. Analyzing Contingent and Other Liabilities The following independent situations represent various types of liabilities. Analyze each situation and indicate which of the following is the proper accounting treatment for the company: (a) record a liability on the balance sheet, (b) disclose the liability in a financial statement footnote, or (c) neither record nor disclose any liability. A stockholder has filed a lawsuit against Windsor Corporation. Clinch's attorneys have reviewed tne facts of the case. Their review revealed that similar lawsuits have never resulted in a cash award and it is highly unlikely that this lawsuit will either. Sterling Company signed a 60-day, 10% note when it purchased items from another company Environmental Protection Agency notifies Stark Industries that a state where it has a plant g a lawsuit for groundwater pollution against Stark and another company that has a plant nt to Stark's plant. Test results have not identified the exact source of the pollution. Stark's is fili 4. cturing process often produces by-products that can pollute groundwater. lin Company manufactured and sold products to a retailer that later sold the products to onisumers. Franklin Company will replace the product if it is found to be defective within 90 the sale to the consumer. Historically, 1.2% of the products are returned for replacement. e 7-6 t da