How was the loss disclosed on the income statement

Assignment Help Finance Basics

Reference no: EM131410559

When Eli Lilly, a major pharmaceutical company, chose to refinance some of its outstanding bonds payable, the company paid off the outstanding debt and replaced it with a new bond issuance. At the time of the refinancing, the balance sheet value of the outstanding debt was approximately $35 million. On the company's income statement a loss of $7.2 million (net of $4.8 million in tax benefits) was reported.

a. Compute the payment made by Eli Lilly to retire the original debt.

b. How did the company benefit from the $4.8 million tax effect?

c. Lilly uses the indirect method of presentation for the statement of cash flows. How was the loss treated on that statement?

d. How was the loss disclosed on the income statement?

Reference no: EM131410559

Questions Cloud

Prepare the journal entry to record the redemption : Assume that the bonds were issued in 2009 for 102, and at the time of redemption they had a balance sheet value of $507,000. Prepare the journal entry to record the bond redemption.

Direction and magnitude of the frictional force : A 2,199-kg car is moving up a road with a slope (grade) of 29% while slowing down at a rate of 2.1 m/s^2. What is the direction and magnitude of the frictional force?

Compute working capital and current ratio and quick ratio : Visit the websites of Google and Microsoft and retrieve their annual reports. Using these financial reports, compute the working capital, current ratio, and quick ratio for each company.

Angle of refraction in the water : Light passes from air to water (n=1.33). The incoming ray in air is at an angle of 17.0° to the normal. What is the angle of refraction in the water?

How was the loss disclosed on the income statement : Lilly uses the indirect method of presentation for the statement of cash flows. How was the loss treated on that statement?

Will google be able to sustain this type of culture : What is unique about the GOOGLE culture - What might be some aspects of the DARK SIDE of Google? and Why is GOOGLE training their employees in mindfulness? Is there also a dark side to mindfulness training?

What is the magnetic field : A circular coil of wire has a radius of 7.0cm and has 130 turns of wire that carries 6.9 A of current. What is the magnetic field at the center of the coil? Express your answer to two significant figures and include appropriate units.

Explain why a loss was recognized on the transaction : Why would a company repurchase debt if it led to a loss being recognized on the income statement?

Calculate the density of a cylindrical fibers : A) If a fiber has a linear density of 4 Decitex, what is its linear density in both Denier and Tex? B) Calculate the density of a cylindrical fibers with 1.34g, a length of 150 cm, and a diameter of 0.20 cm.

User Account

All Pages