The following items are classified as current liabilities on Yum! Brands' balance sheets as of

December 27, 2014, and December 28, 2013:

Required
1. Yum! Brands uses the indirect method to prepare its statement of cash flows. Prepare the Operating 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 Yum! Brands has the ability to pay these liabilities as they become due?

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Consolidated Balance Sheets YUM! Brands, Inc. and Subsidiaries December 27, 2014 and December 28, 2013 in millions) 2014 2013 Current Liabilities Accounts payable and other current liabilities Income taxes payable Short-term borrowings $1,972 267 95 2411 $1,929 169 71 96 $2,265 Total Current Liabilities