Reading PepsiCo’s Statement of Cash Flows A portion of the Financing Activities section of PepsiCo’s statement of cash flows for the year ended December 27, 2008, follows (in millions): Financing Activities:
Proceeds from the issuance of long-term debt .......$3,719
Payment of long-term debt ....... ........(649)
Short-term borrowings by original maturity:
More than three months—proceeds ...............89
More than three months—payments ....... ......(269)
Three months or less, net ..................625

Required
1. Explain why proceeds from debt is shown as a positive amount and payment of debt is shown as a negative amount.
2. During 2008, interest rates remained at low levels. Explain why the company might have paid off debt during such conditions.
3. PepsiCo has a Deferred Income Tax account listed in the Asset category of its balance sheet. Would an increase in that account result in an addition or a subtraction on the statement of cash flows? in which category?