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.$ millionsYear 7 Year 6Current LiabilitiesCurrent portion of long-term obligationsShort-term obligationsAccounts payableAccrued liabilitiesTaxes payable (including income taxes)$175 $896915302,996 3,1961,046 1,0991,289 997$6,197 $5,911Note 7 Short-Term ObligationsThe 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 interestrate 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 anaverage 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 weresupported 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 cashfunds. 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 Year0b. 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 obligationsd. 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 $ 0million◆ appear as liabilities on its balance sheet.◆

The liabilities which are payable within a period of 12 months are called as…

Answered: Listed below are the current liability

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...

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