Current Portion of LongTerm Debt PepsiCo Inc reported the fo

Current Portion of Long-Term Debt

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:

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?

Solution

(a) The current portion of the long term debt will be reported as current liability in the current year\'s December 31 balance sheet. The current portion here is $4071m which was disclosed as current liability.

(b) Current liability is the current portion of the Total long term debt here.

Preceding year current liability = $5076m

Current year current liability = $4071m

Change in current liability = Preceding year curren liability - Current year current liability

= $5076 - $4071 = $1005m

(c) If Pepsico company did not issue additional long term debt next year, then its total long term debt on December 31 will be the same as total long term debt in the current year as reduced by the current portion. Because the current portion ($4071m) of the total long term debt will be paid in the next year and the amount left willl be the total long term debt.

Total long term debt in next year:

Current year total long term debt $33284

Less: Current portion ($4071)

Total long term debt next year $29213m