Chapter Review Integrative Case 9.1 Walmart LO 9-1 - Discuss and apply the criteria for the recognition of revenues from operating activities, as well as the related assets, liabilities, and cash flows. Exhibits 1.26, 1.27 and 1.28 of Integrative Case 1.1 (Chapter 1) present the financial statements for Walmart for 20122015. In addition, the website for this text contains Walmart's December 31, 2015, Form 10-K. You should read the management discussion and analysis (MD&A), financial statements, and notes to the financial statements, especially Note 2, "Summary of Significant Accounting Policies." LO 9-2 - Discuss and apply the criteria for the recognition of expenses from operating activities, as well as the related assets, liabilities, and cash flows. LO 9-3 - Use the financial statement and note information for corporate income taxes to analyze the firm's tax strategies. Required: Revenue Recognition j. Are Walmart's foreign earnings growing relative to U.S. earnings? k. What is the interpretation of the line item "Net impact of repatriated international earnings"? Why is it a positive reconciling item in some years but negative in other years? 1. What are the two largest deferred tax assets? Explain how they have arisen and why they are assets. m. What is the "valuation allowance"? It has decreased during the two-year period. What is the implication of this decrease for earnings? n. Why does Walmart report a deferred tax liability for property and equipment? Speculate whether Walmart expanded or contracted based on the information in this section of the tax note. Required: Pensions 0. What kind of pension plans does Walmart have, and how are earnings affected by each? Chapter Review Integrative Case 9.1 Walmart LO 9-1 - Discuss and apply the criteria for the recognition of revenues from operating activities, as well as the related assets, liabilities, and cash flows. Exhibits 1.26, 1.27 and 1.28 of Integrative Case 1.1 (Chapter 1) present the financial statements for Walmart for 20122015. In addition, the website for this text contains Walmart's December 31, 2015, Form 10-K. You should read the management discussion and analysis (MD&A), financial statements, and notes to the financial statements, especially Note 2, "Summary of Significant Accounting Policies." LO 9-2 - Discuss and apply the criteria for the recognition of expenses from operating activities, as well as the related assets, liabilities, and cash flows. LO 9-3 - Use the financial statement and note information for corporate income taxes to analyze the firm's tax strategies. Required: Revenue Recognition j. Are Walmart's foreign earnings growing relative to U.S. earnings? k. What is the interpretation of the line item "Net impact of repatriated international earnings"? Why is it a positive reconciling item in some years but negative in other years? 1. What are the two largest deferred tax assets? Explain how they have arisen and why they are assets. m. What is the "valuation allowance"? It has decreased during the two-year period. What is the implication of this decrease for earnings? n. Why does Walmart report a deferred tax liability for property and equipment? Speculate whether Walmart expanded or contracted based on the information in this section of the tax note. Required: Pensions 0. What kind of pension plans does Walmart have, and how are earnings affected by each
