Transit Airlines provides regional jet service in the Mid-South. The following is information on fiabintes of Transit at December 31,2024 Transir's fiscal year ends on December 31 its annual financial statements are issued in Aprit 1. Transir has outstanding 6.2% bonds with a tace amount of $63 million. The bonds mature on July 31,2030 . Bondholders have the option of calling (demanding payment on) the bonds on July 31,2025 , at a redemption price of $63 million. Market conditions are stich that the call option is not expected to be exercised 2 A $42 million 9% bank loan is payabie on October 31,2027 . The bank has the right to demand payment after any fiscal year-end in which Transit's ratio of current assets to current labilities falis below a contractual minimum of 19 to 1 and remains so for sux months. That ratio was 175 on December 31,2024 , due primarily to an intentional temporary decline in parts irventories. Normal inventory levels will be reestablished during the sixth weck of 2025 3. Transit management intended to refinance $61 milion of 6% notes that mature in May 2025 in late February 2025 , prior to the issuance of the 2024 financial statements, Transit negotiated a line of credit with a commercial bank for up to $56 million any time during 2025. Any bortowings wal mature two years from the date of borrowing 4. Transit is involved in a lawsuit resulting from a dispute with a food cateret. On February 13, 2025, judgment was rendered against Transit in the amount of $40 malion plus interest, a total of $41 million. Transit plans to appeal the judgment and is unable to predict its outcome though it is not expected to have a material adverse effect on the fompany Required: 1. How should the 6:2% bonds be classitied by Transit among liabilites in its balance sheet? 2. How should the 9% bank loan be classified by Transit among liablities in its balance sheet? 3. How should the 6% notes be classified by Transit among liabilities in its balance sheet? 4. How should the lawsult be reported by Transit? 5. Calculate the total current liabilities, total long-term liabilities, and total liabilities of a classifred batance sheet for Transit Airines at December 31,2024 . Transir's accounts payable and accruats were $57 milion. Complete this qquestion by entering your answers in the tabs below. How should the 6.2% bonds, 9% bank loan and 6% notes be classified by Transit among liabilities in its balance sheet, How should the lawsult be reported by Transit? Note: Enter your answers in millions (f.e., 5,000,000 should ber entered as 5). option of calling (demanding payment on) the bonds on July 31, 2025, at a redemption price of $63 milfion. Market conditions are such that the call option is not expected to be exercised. 2. A $42 million 9% bank loan is payable on October 31, 2027. The bank has the right to demand payment after any fiscal year-end in which Transit's ratio of current assets to current liabilities falls below a contractual minimum of 1.9 to 1 and remains so for six months. That ratio was 1.75 on December 31,2024 , due primarily to an intentional temporary decline in parts inventories. Normal inventory levels will be reestablished during the sixth week of 2025 3. Transit management intended to refinance $61 million of 6% notes that mature in May 2025 In late February 2025, prior to the issuance of the 2024 financial statements. Transit negotiated a line of credit with a commercial bank for up to $56 million any time during 2025. Any borrowings will mature two years from the date of borrowing. 4. Transit is involved in a lawsuit resulting from a dispute with a food cateret On February 13, 2025, judgment was rendered against Transit in the amount of $40 million plus interest, a total of $41 million. Transit plans to appeal the judgment and is unable to predict its outcome though it is not expected to have a material adverse effect on the company. Required: 1. How should the 6.2% bonds be classified by Transit among liabilities in its balance sheet? 2. How should the 9% bank loan be classified by Transit among liabilities in its balance sheet? 3. How should the 6% notes be classified by Transit among liabilities in its balance sheet? 4. How should the lawsuit be reported by Transit? 5. Calculate the total current liabilites, total long-term liabilities, and total liabilities of a classified balance sheet for Transit Airlines at December 31,2024 Transits accounts payable and acciuals were $57million. Complete this question by entering your answers in the tabs below. Caiculate the total current liabilities, total long-term liabilities, and total flabilities of a classified balance sheet for Transit Airlines at December 31,2024 . Transit's accounts payable and accruals were $57 million. Note: Enter vour answers in millions (Ci.e., 5,000,000 should be entered as 5)
