Question: Python.com owes $6 million on notes payable that will come due for payment in $1.5 million installments over a four-year period. The company has used
Python.com owes $6 million on notes payable that will come due for payment in $1.5 million installments over a four-year period. The company has used its cash to advertise heavily in the competitive dotcom business environment. The result is that cash is scarce, and Python.com's management doesn't know where next year's note payment will come from. Python.com has prepared its balance sheet at December 31, 20X4. and reports the following: Liabilities Current: Accounts payable..... Salary payable and other accrued liabilites Unearned revenue collected in advance. Income tax payable Total current liabilities Long-term: Notes payable.. $1,900,000 300.000 500,000 200,000 2.900,000 6,000,000 What is wrong with the way Python.com reported its liabilities? Why did Python.com report its liabilities this way? What is unethical about this way of reporting these liabilities? Who can be harmed as a result?
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