The following items are classified as current liabilities on Burger King Holdings, Inc.'s balance sheets as of June 30, 2010, and June 30, 2009:

Required
1. Burger King uses the indirect method to prepare its statement of cash flows. Prepare the Operating Activities section of the cash flow statement, which indicate show each item will be reflected as an adjustment to net income. If you did not include any of the preceding items, explain why.
2. How would you decide if Burger King has the ability to pay these liabilities as they become due?

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As of June 30 2010 2009 (In millions) Current liabilities 106.9 71.9 200.9 93.3 473.0 667.7 65.3 344.6 68.2 127.0 67.8 220.0 67.5 482.3 755.6 65.8 354.5 74.1 $1,732.3 Accounts and drafts payable Accrued advertising Other accrued liabilities Current portion of long-term debt and capital leases Total current liabilities Term debt, net of current portion Capital leases, net of current portion Other liabilities, net Deferred income taxes, net Total liabilities