Question 1 (15 marks) 1. Pacific's fiscal year ends on December 31. At the end of the 2018 fiscal year, the company had notes payable of $12 million due on February 8, 2019. Pacific obtained the agreement of its lenders on February 3, 2019, to roll over $9 million of the notes to February 8, 2021. 2. Pacific paid off the remaining $3 million of its notes on February 8, 2019, through proceeds from the maturation of its three-month Certificates of Deposit. Through his lawyers, one of Pacific's construction workers notified management on January 5, 2019, that he planned to sue the company for $1 million related to a work-site injury on December 20, 2018. As of December 31, 2018, management had been unaware of the injury, but reached an agreement on February 23, 2019, to settle the matter by paying the employee's medical bills of $87,000. Pacific's financial statements were authorized for issue on March 3, 2019. Required: 1. What amount(s) if any, related to the situations described should Pacific report among current liabilities in its statement of financial position at December 31, 2018? (6 marks) 2. What amount(s) if any, related to the situations described should Pacific report among long-term liabilities in its statement of financial position at December 31, 2018? (3 marks) 3. How would you think the amount should be accrued as either a cuirent or long-term liability if any, related to the legal claim for $1 million but $87,000 payment of the employee's medical bills had occurred on March 15, 2019, instead? (3 marks) 4. How would you think the amount should be accrued as either a current or long-term liability if any, related to the legal claim for $1 million if the work-site injury had occurred on January 3, 2019, instead? (3 marks) Total: 15 marks