(Learning Objective 1, 5: Analyzing liabilities) Geodesic Domes, Inc., builds environmentally sensitive structures. The company’s 20X8 revenues totaled $360 million, and at December 31, 20X8, the company had $65 million in current assets. The December 31, 20X8, balance sheet reported the liabilities and stockholders’ equity as follows.
|
At year end (In millions) |
20X8 |
20X7 |
|
|
Liabilities and Shareholders’ Equity |
|||
|
Current Liabilities |
|||
|
Accounts payable |
$ 29 |
$ 26 |
|
|
Accrued expenses |
16 |
20 |
|
|
Employee compensation and benefits |
9 |
11 |
|
|
Current portion of long term debt |
59 |
— |
|
|
Total Current Liabilities |
115 |
57 |
|
|
Long Term Debt |
31 |
115 |
|
|
Postretirement Benefits Payable |
21 |
27 |
|
|
Other Liabilities |
73 |
17 |
|
|
Shareholders’ Equity |
$299 |
70 |
|
|
Total Liabilities and Shareholders’ Equity |
5 |
$286 |
|
Required
1. Describe each of Geodesic Domes, Inc.’s, liabilities and state how the liability arose.
2. What were the company’s total assets at December 31, 20X8? Was the company’s debt ratio at the end of 20X8 high, low, or in a middle range?