To help familiarize you with the financial reporting of a real company in order to further your understanding of the chapter material you are learning.

This case focuses on the liabilities of Columbia Sportswear Company. Current liabilities are those obligations that will become due and payable within the next year or operating cycle (whichever is longer), whereas long-term liabilities are those that are due and payable more than one year from the balance sheet date. It is important to properly classify and report these liabilities because they affect liquidity.

We now consider the current and long-term liabilities of Columbia Sportswear Company. Refer to the Columbia Sportswear Company financial statements found in Appendix A. Also, consider notes 8 through 13 and 22 in the footnotes included in the annual report.

Requirements

1. What was the balance of total current liabilities at December 31, 2016? What was the balance of total current liabilities at December 31, 2015? Did the amount of total current liabilities increase or decrease? What caused the biggest change in total current liabilities?

2. Look at the balance of accrued liabilities at December 31, 2016 and December 31, 2015. Then look at the footnote that provides the breakdown of the total accrued liabilities. What makes up the accrued liabilities, and why would they be included in the current liability section? Which liability makes up the biggest portion of the accrued liabilities?

3. What was the balance of total long-term liabilities at December 31, 2016? What was the balance of total noncurrent liabilities at December 31, 2015? Did the amount of total noncurrent liabilities increase or decrease? What caused the biggest change in total noncurrent liabilities?

4. Compare the total amount of current liabilities with the total amount of long-term liabilities at December 31, 2016. Is the amount of total current liabilities more than or less than the total long-term liabilities? What does this result mean? Is the amount of total Columbia Sportswear Company shareholders’ equity more than or less than the total of all the liabilities at December 31, 2016? What does this result mean?

5. Examine the long-term liabilities section of the balance sheet. Can you determine what deferred income taxes are? Why does income taxes payable appear in both the current liabilities and long-term liabilities sections of the balance sheet?