Listed below are the current liability section and Note 7 of the Year 7 balance sheet...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Listed below are the current liability section and Note 7 of the Year 7 balance sheet of Joli Roma Corporation (the Company), a major oil company. $ millions Year 7 Year 6 Current Liabilities Current portion of long-term obligations Short-term obligations Accounts payable Accrued liabilities Taxes payable (including income taxes) $175 $89 691 530 2,996 3,196 1,046 1,099 1,289 997 $6,197 $5,911 Note 7 Short-Term Obligations The Company's "short-term obligations" consist of notes payable and commercial paper. Notes payable as of December 31, Year 7, totaled $102 million at an average annual interest rate of 5.7%, compared with $29 million at an average annual interest rate of 5.7% at year-end Year 6. Commercial paper borrowings at December 31, Year 7, were $839 million at an average annual interest rate of 5.7% compared with $260 million at an average annual interest rate of 5.9% as of December 31, Year 6. Bank lines of credit available to support existing commercial paper borrowings of the corporation amounted to $588 million at both December 31, Year 7 and Year 6. All of these were supported by commitment fees. The corporation also maintains compensating balances with a number of banks for various purposes. Such arrangements do not legally restrict withdrawal or usage of available cash funds. In the aggregate, they are not material in relation to total liquid assets. a. Explain the origin of the $175 million current portion of long-term obligations in current liabilities of Year 7. The $175 million is the portion of the Company's ◆ coming due in Year 0 and which the company expects to pay off in Year 0 b. What amount of Joli Roma's long-term debt reflected in its current liabilities reported in Year 6 did the Company pay off in Year 7? The Company paid $ 0 million in Year 7. c. During Year 7, did the Company reduce its average yearly interest incurred on its short-term obligations described in Note 7? Assuming interest rates remained constant, the Company → its average interest obligations because short-term obligations d. Do the lines of credit that Joli Roma holds at the end of Year 7 appear as liabilities on its balance sheet? The lines of credit amounting to $ 0 million ◆ appear as liabilities on its balance sheet. ◆ Listed below are the current liability section and Note 7 of the Year 7 balance sheet of Joli Roma Corporation (the Company), a major oil company. $ millions Year 7 Year 6 Current Liabilities Current portion of long-term obligations Short-term obligations Accounts payable Accrued liabilities Taxes payable (including income taxes) $175 $89 691 530 2,996 3,196 1,046 1,099 1,289 997 $6,197 $5,911 Note 7 Short-Term Obligations The Company's "short-term obligations" consist of notes payable and commercial paper. Notes payable as of December 31, Year 7, totaled $102 million at an average annual interest rate of 5.7%, compared with $29 million at an average annual interest rate of 5.7% at year-end Year 6. Commercial paper borrowings at December 31, Year 7, were $839 million at an average annual interest rate of 5.7% compared with $260 million at an average annual interest rate of 5.9% as of December 31, Year 6. Bank lines of credit available to support existing commercial paper borrowings of the corporation amounted to $588 million at both December 31, Year 7 and Year 6. All of these were supported by commitment fees. The corporation also maintains compensating balances with a number of banks for various purposes. Such arrangements do not legally restrict withdrawal or usage of available cash funds. In the aggregate, they are not material in relation to total liquid assets. a. Explain the origin of the $175 million current portion of long-term obligations in current liabilities of Year 7. The $175 million is the portion of the Company's ◆ coming due in Year 0 and which the company expects to pay off in Year 0 b. What amount of Joli Roma's long-term debt reflected in its current liabilities reported in Year 6 did the Company pay off in Year 7? The Company paid $ 0 million in Year 7. c. During Year 7, did the Company reduce its average yearly interest incurred on its short-term obligations described in Note 7? Assuming interest rates remained constant, the Company → its average interest obligations because short-term obligations d. Do the lines of credit that Joli Roma holds at the end of Year 7 appear as liabilities on its balance sheet? The lines of credit amounting to $ 0 million ◆ appear as liabilities on its balance sheet. ◆
Expert Answer:
Answer rating: 100% (QA)
a The current portion of longterm obligations is the part of the longterm debt that is due within th... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Stores (Wal-Mart) is the largest retailing firm in the world. Building on a base of discount stores, Wal-Mart has expanded into warehouse clubs and Supercenters, which sell traditional discount store...
-
When estimating the useful life of an asset, accountants do not consider vulnerability to obsolescence. the cost to replace the asset at the end of its useful life. the intended use of the asset....
-
Listed below are the 2018 financial statements for Garners' Platoon Mental Health Care, Inc. Spread the balance sheet and income statement. Calculate the financial ratios for the firm, including the...
-
1. When a limited partnership is formed A. The partnership activities are limited B. All partners have limited liability C. Some of the partners have limited liability D. None of the partners have...
-
Which member in each of the following sets has higher priority? (a) H or Br (b) C1 or Br (c) CH 3 or CH 2 CH 3 (d) NH 2 or OH (e) CH 2 OH or CH 3 (f) CH 2 OH or CH = O
-
An electron diffraction experiment gives the same pattern as an x-ray diffraction experiment with the same sample. How do we know the wavelengths of the electrons and x-rays are the same? Would they...
-
Why is leasing versus buying an unfair comparison?
-
Baxter, Inc., owns 90 percent of Wisconsin, Inc., and 20 percent of Cleveland Company. Wisconsin, in turn, holds 60 percent of Clevelands outstanding stock. No excess amortization resulted from these...
-
what happens when ou use an aggregation function in a calculated column?
-
Jenny Atkinson is reviewing employment offers. The employment offer from ILU, Inc. includes private health insurance that ILU, Inc. will purchase on her behalf. ILU Inc. will have to pay a $1,840...
-
20. Baker Electronics reports the following data for the year ended December 31, 2019: Cash receipt from sale of equipment Depreciation Expense Cash payment of Dividends Cash receipt from issuance of...
-
Write methods: that compute the area and the perimeter of the ellipse e. Add these methods to a class Geometry. The chal lenging part of this assignment is to find and implement an accurate formula...
-
Write a method randomShape that randomly generates objects implementing the Shape interface in the Java library API: some mixture of rectangles, ellipses, and lines, with random positions. Call it...
-
What does JUnit do when a test method throws an exception? Try it out and report your findings.
-
Suppose a vending machine contains products, and users insert coins into the vending machine to purchase products. Draw a UML diagram showing the dependen cies between the classes VendingMachine,...
-
In 2008 Airbnb was officially launched as an alternative to hotel rooms. The company encouraged people with spare rooms to rent their space to individual travellers when busy events were taking place...
-
A firm called Nationwide Insurance has recently be advertising an automobile policy with a "vanishing deductible. With this policy, the deductible falls $100 per year (with no increase in the price...
-
Which property determines whether a control is available to the user during run time? a. Available b. Enabled c. Unavailable d. Disabled
-
On January 1, Year 1, the Hoverman Corporation made amendments to its defined benefit pension plan, resulting in $150,000 of past service costs. The plan has 100 active employees, of which 60 are...
-
The Vanguard Group is an investment firm with more than 50 different mutual funds in which the public may invest. Among these funds are 13 international funds that concentrate on investments in...
-
A foreign subsidiary of Wampoa Ltd. has one asset (inventory) and no liabilities. The subsidiary operates with a significant degree of autonomy from Wampoa and primarily uses the local currency (the...
-
What are the three major components in quality training recommended by Juran?
-
The Rocky Flats Plant of Rockwell International is committed to hiring hard-core unemployed people for entry-level positions with the intention of migrating them upward. However, many new employees...
-
The CEO of ABC Inc. is dynamic and visionary in every area but one. He does not believe in providing corporate training to his personnel. In fact, he is fond of saying, I hire personnel and pay them...
Study smarter with the SolutionInn App