Presented below is the condensed financial statements of Raleigh Airlines Ltd. for the year ended December 31, 2018. Consolidated Statement of Financial Position At December 31 (Stated in thousands of Canadian dollars)

	2018	2017
Assets
Currents Assets:
Cash and Cash Equivalents	1185806	1147076
Marketable Securities	93771	226090
Total cash,cash equivalents and marketable securities	1279577	13732166
Restricted Cash	115615	109700
Accounts Receivable	145544	152492
Prepaid Expenses,Deposits and other	190242	138676
Inventory	39742	43045
	1770720	1817079
Non Current Assets
Property and Equipment	4814200	4567504
Intangible Assets	54851	59517
Other Assets	118284	78584
Total Assets	6758055	6522684
Liabilities and Shareholder's Equity
Current Liabilities
Accounts Payable and Accrued Liabilities	654422	546505
Unearned Revenue	695367	659953
Deferred Rewards Program	224608	185991
Non Refundable Guest Credits	62914	58575
Current Portion of Maintenance Provisions	101852	82129
Current Portion of Long Term Debt	536044	153149
	2275207	1686302
Non Current Liabilities
Maintenance Provisions	278898	270347
Long Term Debt	1442913	1895898
Other Liabilities	33512	19171
Deferred Income Tax	424958	392111
Total Liabilities	4455488	4263829
Shareholders' Equity
Share Capital	548979	548977
Equity Reserves	106655	97514
Hedge Reserves	6856	(1902)
Retained Earnings	1640077	1614266

Total Shareholders' equity 2302567 2258855

Total Liabilities and Shareholders' Equity 6758055 6522684

The net income for 2018 and 2017 were $91,465 and $279,058 respectively. a) Provide a definition for the term current liability. (Refer to the relevant standard or authoritative literature) b) Why is the liabilities section of the statement of financial position of primary significance to bankers, creditors and other users of the financial statements? c) The accountant, in analysing the Statement of Financial Position, observed that the unearned revenue has increased in the current year when compared to the prior year. Is this a positive or negative indicator about the companys liquidity? Explain. d) Evaluate the companys liquidity and financial flexibility by calculating and analysing the following ratios for the two year period. (i) Current ratio (ii) Acid Test Ratio (iii) Deb-to-total Assets (iv) Rate of return on Assets e) On May 20, 2018 a passenger was injured while disembarking one of the companys aeroplane. This was partially the result of his own negligence. The passenger sued Raleigh Airlines Ltd. for $1,000,000. Raleighs legal counsel believes it is possible but not probable that the outcome of the suit will be unfavourable and that the settlement would cost the company from $500,000 to $800,000. Discuss the proper accounting treatment, including any required disclosure for the situation. Give the rationale for your answer.