1 Summary of Significant Accounting Policies (in part)

Cash and Cash Equivalents

The Company considers investments with a maturity when purchased of three months or less to be cash equivalents.

Inventories

WALMART INCORPORATEDConsolidated Balance Sheets($ in millions except per share data)Amounts in millionsAs of January 31,20202019AssetsCurrent assets:Cash and cash equivalents$ 9,465$ 7,722Receivables, net6,2846,283Inventories44,43544,269Prepaid expenses and other1,6223,623Total current assets61,80661,897Property and equipment, net105,208104,317Operating lease right-of-use assets17,424Finance lease right-of-use assets, net4,417Property under capital lease and financing obligations, net7,078Goodwill31,07331,181Other long-term assets16,567 14,822Total assets$ 236,495$ 219,295Liabilities and equityCurrent liabilities:Short-term borrowings$ 575$ 5,225Accounts payable46,97347,060Accrued liabilities22,29622,159Accrued income taxes280428Long-term debt due within one year5,3621,876Operating lease obligations due within one year1,793Finance lease obligations due within one year511Capital lease and financing obligations due within one year729Total current liabilities77,79077,477Long-term debt43,71443,520Long-term operating lease obligations16,171Long-term finance lease obligations4,307Long-term capital lease and financing obligations6,683Deferred income taxes and other12,96111,981Commitments and contingencies Equity:Common stock284288Capital in excess of par value3,2472,965Retained earnings83,94380,785Accumulated other comprehensive loss(12,805)(11,542)Total Walmart shareholders equity74,66972,496Noncontrolling interest6,8837,138Total equity81,55279,634Total liabilities and equity$ 236,495$ 219,295

The Company values inventories at the lower of cost or market as determined primarily by the retail inventory method of accounting, using the last-in, first-out (LIFO) method for the Walmart U.S. segments inventories. The inventory at the Walmart International segment is valued primarily by the retail inventory method of accounting, using the first-in, first-out (FIFO) method. At January 31, 2020 and January 31, 2019, the Companys inventories valued at LIFO approximated those inventories as if they were valued at FIFO.

Revenue Recognition

The Company recognizes sales revenue, net of sales taxes and estimated sales returns, at the time it sells merchandise to the customer. eCommerce sales include shipping revenue and are recorded upon delivery to the customer. Customer purchases of shopping cards are not recognized as revenue until the card is redeemed and the customer purchases merchandise using the shopping card. The Company recognizes revenue from service transactions at the time the service is performed. Generally, revenue from services is classified as a component of net sales in the Companys Consolidated Statements of Income.

Does Walmart separately report current assets versus long-term assets, and current liabilities versus long-term liabilities?

1. What amounts did Walmart report for the following items for 2020: YES OR NO
2. Current assets
   1. TOTAL ASSETS: _______ MILLIONS
   2. CURRENT ASSETS: ________ MILLIONS
   3. CURRENT LIABILITIES: _________ MILLIONS
   4. TOTAL EQUITY: _________ MILLIONS
   5. RETAINED EARNINGS: ________ MILLIONS
   6. INVENTORY: _______ MILLIONS
3. What is Walmarts largest current asset? What is its largest current liability?
   1. WALMART'S LARGEST CURRENT ASSET:
   2. WALMART'S LARGEST CURRENT LIABILITY:
4. Compute Walmarts current ratio for 2020. Note: Round your answer to 2 decimal places.
   1. CURRENT RATIO:
5. Identify the following items from the summary of significant accounting policies:
   1. Does the company have any securities classified as cash equivalents? YES OR NO
   2. What cost method does the company use for its U.S. inventory? YES OR NO
   3. When does the company recognize revenue from service transactions? YES OR NO