1.

How much did The Home Depot owe for salaries and related expenses at January 30, 2011? Was this an increase or decrease from the previous year?

	$1,263 million (Increase)
	$1,263 million (Decrease)
	$1,290 million (Increase)
	$1,290 million (Decrease)

2.

Refer to the Revenues note in the Summary of Significant Accounting Policies that follows The Home Depots statements of cash flows. How does the company account for customer payments received in advance of providing services?

	The funds are not deposited in the bank account, and no entry is recorded.
	Record the prepayment as revenue.
	The funds are deposited in the bank account and no entry is recorded.
	The revenue is deferred until the goods or services are provided to the customer.

3.

What adjusting journal entry must The Home Depot make when it provides services paid by gift card?

dr Service Revenue, cr Unearned Revenue

dr Unearned Revenue, cr Service Revenue

dr Cash, cr Unearned Revenue

dr Unearned Revenue, cr Cash

4. What amount of Net Sales does the company report during the year ended January 30, 2011?

	$67,997
	$44,639
	$47,298
	$66,176

5. Assuming that Cost of Sales is the companys term for Cost of Goods Sold, compute the companys gross profit percentage for the most recent two years.

	65.7% and 66.1%
	33.9% and 33.7%
	34.3% and 33.9%
	33.7% and 34.3%

6. Assume that The Home Depot experienced no shrinkage in the most current year. Using the balance sheet and income statement, estimate the amount of purchases in the year ended January 30, 2011.

$10,625

$10,188

$44,693

$45,130

7. How much inventory does the company hold on January 30, 2011? Does this represent an increase or decrease in comparison to the prior year?

	$10,188 (Increase)
	$10,188 (Decrease)
	$10,625 (Increase)
	$10,625 (Decrease)

8. What method(s) does the company use to determine the cost of its inventory? Describe where you found this information?

	FIFO; Note 1
	LIFO; Note 1
	Weighted average cost; the Balance Sheet
	Specific Identification; Managements Discussion and Analysis

9. Compute to one decimal place the companys inventory turnover ratio and days to sell for the most recent year.

	6.5 and 56.2
	4.3 and 84.9
	4.2 and 86.9
	4.6 and 79.3

10.

Does the company believe FIFO, or weighted average cost, is a better method?

	Weighted average cost
	FIFO