The 16-Bit Corporation, whose December 31, 2019 year-end financial statements were issued February 16, 2020, had...

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The 16-Bit Corporation, whose December 31, 2019 year-end financial statements were issued February 16, 2020, had...

The 16-Bit Corporation, whose December 31, 2019 year-end financial statements were issued February 16, 2020, had the following transactions.

For each transaction, indicate the amount that 16-Bit would show as a current liability on its December 31, 2019 balance sheet under US GAAP.

Indicate $ “0” if no amount would be shown as a current liability.

1.) On December 10, 2019, a $10,000,000 lawsuit was filed against 16-Bit Corporation. 16-Bit and its attorneys have determined that it is probable that 16-Bit will lose and have estimated the range of loss between $4,000,000 and $6,000,000.

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Answer 1

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1) $ 0 , no current liability will be shown in the balance sheet .

Current Liablity ; current liability are the liablity which is payable by the corporation or which is due for the payment with in 12 month or with in normal operating cycle.

Example of current liability are account payable, short term debt, dividend and notes payable.

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