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The following independent situations represent various types of liabilities. Analyze each situation and indicate which...

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Accounting

The following independent situations represent various types of liabilities. Analyze each situation and indicate which of the following is the proper accounting treatment for the company: (a) record a liability on the balance sheet, (b) disclose the liability in the footnote, or (c) neither record nor disclose any liability (10 points) a. The Environmental Protection Agency notifies Stark Industries that a state where it has a plant is filing a lawsuit for groundwater pollution against Stark Industries. Test results have not identified the exact source of the pollution. Starks manufacturing process often produces by-products that can pollute groundwater. b. Franklin, Inc. signed a 60-day 8% note for $105,000 on May 12, 2017 to finance its seasonal working capital needs. c. Walmart, Inc. owes $180,000 at year-end for inventory purchases. d. Nike, Inc. received a $250,000 deposit from Foot Locker for an order on the new line of running shoes that will be ready for shipment in September 2017. e. A stockholder has filed a lawsuit against Nike, Inc. Companys attorney reviewed the case and their review revealed that similar lawsuits have never resulted in cash award and it is highly unlikely that this lawsuit will either.

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