Based on this information, do you have any reason to believe that ABC is underreporting its liabilities? Discuss symptoms you looked for and the results of your analysis. Estimate the extent to which liabilities may be underreported.
ABC Corp., a retailer, had the following comparative balance sheets at December 31, 2007:

Interest expense was $1.7 million in 2006 and $1.5 million in 2007. Other companies with credit ratings comparable to ABC's can borrow at 9 percent.

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1 2/3 1/06 Cash Accounts receivable Inventory Warehouse (net) 800,000 4,000,000 9,000,000 10,000000 $23,800,000 12/31/07 $900,000 4,250,000 8,500,000 10,500,000 $24,150,000 Accounts payable Notes payable Stockholders' equity $ 1,490,000 2,000,000 10310000 $1,400,000 13,250,000 9,500,000 $24,150,000 $23 800.000