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Required:

3. What is the total debt (including current liabilities and deferred taxes) reported in the balance sheet? How has that amount changed over the most recent two years?

4. Compare the total liabilities (including current liabilities and deferred taxes) with the shareholders' equity and calculate the debt to equity ratio for the most recent two years. Has the proportion of debt financing and equity financing changed recently?

5. Does Macy's obtain more financing through notes, bonds, or commercial paper? Are required debt payments increasing or decreasing over time? Is any short-term debt classified as long-term? Why?

6. Note 11: Financing includes the following statement: “On June 23, 2008, the Company issued $650 million aggregate principal amount of 7.875% senior notes due 2015. The net proceeds of the debt issuance were used for the repayment of amounts due on debt maturing in 2008.” Under some circumstances, Macy's could have reported the amounts due in 2008 as long-term debt at the end of the previous year even though these amounts were due within the coming year. Obtain the relevant authoritative literature on classification of debt expected to be financed using the FASB's Codification Research System. You might gain access from the FASB website (www.fasb.org), from your school library, or some other source. Determine the criteria for reporting currently payable debt as long-term. What is the specific codification citation that Macy's would rely on in applying that accounting treatment?