PepsiCo, Inc., reported the following information about its long-term debt in th

Question

PepsiCo, Inc., reported the following information about its long-term debt in the notes to a recent financial statement (in millions): Long-term debt is comprised of the following:

                                        current year                           previous year

total long term debt             33,284                                28,897

less current portion        (4,071)                                   (5,076)

long term debt             -------------                              ---------------

                                    29,213                                     23,821

a. How much of the long-term debt was disclosed as a current liability on the current year’s December 31 balance sheet?

b. How much did the total current liabilities change between the preceding year and the current year as a result of the current portion of long-term debt?

c. If PepsiCo did not issue additional long-term debt next year, what would be the total long-term debt on December 31 of the upcoming year?

Explanation / Answer

a. The amount of long-term debt disclosed as a current liability on the current year’s December 31 balance sheet is 4,071.

b. the change in total current liabilities between the preceding year and the current year as a result of the current portion of long-term debt is a decrease of 1,005 (5076-4071)

c. Total long term debt as on December 31 of the upcoming year if no additional long term debt was issued would be 29,213 as the current portion would have been repaid.

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