Following is the liabilities section of a recent balance sheet of Alliant Techsystems, Inc. (www.atk.com), a commercial ammunitions and defense and aerospace company. Amounts are expressed in millions.
Current Liabilities:
Accounts payable.......................................................... $ 215,755
Contract advances and allowances............................... 81,624
Accrued compensation................................................. 147,287
Accrued income taxes.................................................. 41,681
Other accrued liabilities................................................ 144,540
Total current liabilities.................................................. $ 630,887
Long-term debt............................................................ 1,455,000
Deferred income tax liabilities..................................... 38,316
Postretirement and postemployment
benefits liabilities......................................................... 138,378
Accrued pension liability........................................... 84,267
Other long-term liabilities.......................................... 108,238
Total liabilities........................................................... $2,455,086
Required:
(a) Identify the current liabilities in Alliant Techsystems’ balance sheet that may have been recorded or affected by period-ending adjusting entries.
(b) If $200,000,000 of long-term debt had become due in the year after the balance sheet date, what adjusting entry related to Long-term Debt may have been required in Alliant Techsystems’ accounting records? Why would this entry have been necessary?
(c) Assume that the Accrued Compensation liability was recorded in a period-ending adjusting entry. Prepare that entry.