(Solved by Humans)-Problem 9-2 Effects of Burger King’s Current Liabilities on Its Statement of Cash Flows The...

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Problem 9-2 Effects of Burger King’s Current Liabilities on Its Statement of Cash Flows The following items are classified as current liabilities on Burger King Holdings, Inc.’s balance sheets as of December 31, 2011, and December 31, 2010: As of December 31,   2011   2010   Current liabilities:         Accounts and  drafts payable $      98.4   $      90.5   Accrued advertising 97.4   82.5   Other accrued liabilities 242.2   247.5   Current portion of long term debt and capital  leases 33.5   36.2   Total current liabilities 471.5   456.7   Term debt, net of current portion 2,585.9   2,652.0   Capital leases, net of current  portion 95.4   103.9   Other liabilities, net 366.2   401.9   Deferred income taxes, net 615.3   624.5   Total liabilities $4,134.3   $4,239.0   Source: Burger King Holdings, Inc., 2011 Form 10-K.               Required 1.        Burger King uses the indirect method to prepare its statement of cash flows. Prepare the Operat- ing Activities section of the cash-flow statement, which indicates how 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?