Question

abc has a $5 million liability at december 31, 2018, of which $1 million is payable in each of the next five years. abc reports the liability on the balance sheet as a:

Answer 1

ABC reports the liability on the balance sheet as a $1 million current liability, and a $4 million long-term liability.

What are current and long-term liabilities?

A current liability is a liability that is payable within 12 months or one year.

On the other hand, a long-term liability is a liability that is payable after 12 months or one year.

Since $1 million is payable in each of the next five years, this implies $1 million is payable within one year while $4 million is payable after one year.

Therefore, ABC reports the liability on the balance sheet as a $1 million current liability, and a $4 million long-term liability.

Learn more about liabilities here: https://brainly.com/question/18484315.

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