Transit Airlines provides regional jet service in the Mid-South. The following is information on liabilities of Transit at December 31 . 2021 Transit's fiscal year ends on December 31 its annual financial statements are issued in April. 1. Transit has outstanding 5.2% bonds with a face amount of $95 million. The bonds mature on July 31,2027 . Bondholders have the option of calling (demanding payment on) the bonds on July 31, 2022, at a redemption price of $95 milion. Market conditions are such that the call option is not expected to be exercised. 2. A \$35 millon 4% bank loan is payable on October 31, 2024. 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 175 on December 31, 2021, due primarily to an intentional temporary decline in parts inventories Normal inventory levels will be reestablished during the sixth week of 2022 3. Transit management intended to refinance $58 million of 4% notes that mature in May 2022 In late February 2022, prior to the issuance of the 2021 financial statements. Transit negotiated a line of credit with a commercial bank for up to $52 milion any time during 2022 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 caterer. On February 13, 2022, judgment was rendered against Transit in the amount of $57 million plus interest, a totat of $58 milion. 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 5.2% bonds be classified by Transit among liabilities in its balance sheet? 2. How should the 4% bank loan be classified by Transit among liabilities in its balance sheet? 3. How should the 4% notes be classified by Transit among llabilities in its balance sheet? 4. How should the lawsunt be reported by Transit? 5. Calculate the total current liabilities, total long-term liabilities, and total liabilities of a classified balance sheet for Transit Airtines at December 31,2021 . Transit's accotints payable and accruals were $42 million. 8 Answer is not complete. Complete this question by entering your answers in the tabs below. How should the 5.2% bonds, 4% bank loan and 4% notes be classified by Transit among liabilities in its balance sheet. How should the lawsait be reported by Transit? (Enter your anowers in millions (i.e. ,5,000,000 should be entered as 5).) Transit in the amount of $57 million plus interest, a total of $58 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 5.2% bonds be classified by Transit among liabilities in its balance sheet? 2. How should the 4% bank loan be classified by Transit among liabilities in its balance sheet? 3. How should the 4% notes be classified by Transit among labilities in its balance sheet? 4. How should the lawsuit be reported by Transit? 5. Calculate the total current liabilities, total long-term liabilities, and total liabilities of a classified balance sheet for Transit Airfines at December 31, 2021. Transit's accounts payable and accruals were $42 million. (3) Answer is not complete. Complete this question by entering your answers in the tabs below. How nhould the 5.2% bonds, 4% bank loan and 4% notes be classified by transit among llabilities in ite batance sheet. How should the lawsult be reported by Transit? (Enter your answers in millions (l.,5,5,000,000 should be tntered as 5).) during 2022. Any borrowings will mature two years from the date of borrowing 4. Transit is involved in a lowsuit resulting from a dispute with a food caterer. On February 13. 2022, judgment was rendered against Transit in the amount of $57 miltion plus interest, a total of $58 mition. 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 5.2% bonds be classified by Transit among liabilities in its balance sheet? 2. How should the 4% bank loan be classified by Transit among liabilities in its balance sheet? 3. How should the 4% 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 liabilities, total long-tem liabilities, and total liabilities of a classified balance sheet for Transit Airlines at December 31, 2021. Transit's accounts payable and accruals were $42 milion. (x) Answer is not complete. Complete this question by entering your answers in the tabs below. Calculate the total current filabilities, total long-term liabilities, and total fiabilities of a classified balance sheet for Transit Airtines at December 31, 2021. Transit's accounts payable and accruals were $42 million. (Enter your answers in millions (li.e. 5,000,000 should be entered as 5).)
