A portion of the Financing Activities section of PepsiCo’s statement of cash fl ows for the year ended December 27, 2008, follows (in millions): Financing Activities: Proceeds from the issuance of...

A portion of the Financing Activities section of PepsiCo’s statement of cash fl ows for the year ended December 27, 2008, follows (in millions): Financing Activities: Proceeds from the issuance of long-term debt $3,719 Payment of long-term debt (649) Short-term borrowings by original maturity: More than three months—proceeds 89 More than three months—payments (269) Three months or less, net 625 Required 1. Explain why proceeds from debt is shown as a positive amount and payment of debt is shown as a negative amount. 2. During 2008, interest rates remained at low levels. Explain why the company might have paid off debt during such conditions. 3. PepsiCo has a Deferred Income Tax account listed in the Asset category of its balance sheet. Would an increase in that account result in an addition or a subtraction on the statement of cash fl ows? in which category?