P$13-10$ Subsequent events; classification of debt; loss contingency; financial statement effects LO$13-4,$

$$ LO$13-5$

Van Rushing Hunting Goods' fiscal year ends on December $31.$ At the end of the $2024$ fiscal year, the company had notes payable of $$12$

million due on February $8,2025.$ Rushing sold $2$ million shares of its $$0\mathrm{.}25$ par, common stock on February $3,2025,$ for $$9$ million. The

proceeds from that sale along with $$3$ million from the maturation of some $3-$month CDs were used to pay the notes payable on February

Through his attorney, one of Rushing's construction workers notified management on January $5,2025,$ that he planned to sue the company

for $$1$ million related to a work$-$site injury on December $20,2024.$ As of December $31,2024,$ management had been unaware of the injury,

but reached an agreement on February $23,2025,$ to settle the matter by paying the employee's medical bills of $$75,000.$

Rushing's financial statements were finalized on March $3,2025.$

Required:

What amount$($s$)$ if any, related to the situations described should Rushing report among current liabilities in its balance sheet at

December $31,2024?$ Why?

What amount$($s$)$ if any, related to the situations described should Rushing report among long$-$term liabilities in its balance sheet at

December $31,2024?$ Why?

Assume that, as of March $3,$ management does not think it is probable that it will suffer a material loss because of the injury. How would

your answers to requirements $1$ and $2$ differ if the settlement agreement had occurred on March $15,2025?$ Why?

How would your answers to requirements $1$ and $2$ differ if the work$-$site injury had occurred on January $3,2025?$ Why?