Continuing Cases Target Case . L04-3, L04-4, L04-6, L04-8 Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended January 30, 2016, are available in Connect. This material is also available under the Investor Relations link at the company's website (www.target.com). Required: 1. By what name does Target label its income statement? 2. What amounts did Target report for the following items for the year ended January 30, 2016? a. Sales b. Gross margin c. Earnings from continuing operations before income taxes d. Net earnings from continuing operations e. Net earnings 3. What additional items, if any, does Target report as part of its comprehensive income? 4. Does target prepare the statement of cash flows using the direct method or the indirect method? 5. Which is higher, net earnings or operating cash flows? Which line item is the biggest reason for this differ- ence? Explain why. 6. What is the largest investing cash flow and the largest financing cash flow reported by the company for the year ended January 30, 2016? January 30, January 31. {milions, except footnotes) 2016 2015 Asses Cash and cash equivalents, including short-term investments of $3,008 and $1,620 4,046 S 2210 Inventory 8.601 8.282 Assets of discontinued operations 322 1,068 Other current assets 1,181 2,074 Total current assets 14,130 13,824 Property and equipment Land 8,125 8,127 Buildings and improvements 27.05 28,613 Fixtures and equipment 5,347 5,329 Computer hardware and software 2,617 2.552 Construction in progress 315 424 Accumulated depreciation (16,246) (15,093) Property and equipment.net 25,217 25,952 Noncurrent assets of discontinued operations 75 717 Other noncurrent assets B40 879 Total assets 40,262 5 41.172 Liabilities and shareholders Investment Accounts payable 7.418 S 7,759 Accrued and other cument liabilities 4.238 3,783 Current portion of long-term debt and other bortwings 815 91 Liabilities of discontinued operations 153 103 Total current liabilities 12. 822 11.738 Long-term debt and other borrowings 11.945 12.834 Deferred Income taxes 823 1.180 Noncurrent liabilities of discontinued operations 18 193 Other noncurrent liabilities 1,452 Total noncurrent liabilities 14,683 15.439 Shareholders investment Common stock 50 53 Additional paid in capital 5,348 4,899 Retained earnings B, 188 9,644 Accumulated other comprehensive loss Pension and other benefit liabilities (588) (581) Currency translation adjustment and cash flow hedges (41) (38) Tatal shareholders investment 12.957 13.997 Total liabilities and shareholders' investment 40,282 S 41.172 Common Stock And G. Doosha 50.0233 p.02:235517 Sesund us thangery 30, 2016 690 212.937 Share ested and ustanong January 31, 2015 Preferred Slock Authod 5.000.000 shares sot par valse no share were sued or deg at January 30, 2016 January 31, 2015 Se accompanying Notes to Corso de Financa Staments 1.897 Consolidated Statements of Financial Position 41,172 January 30, January 31, (millions, except footnotes) 2018 2015 Assets Cash and cash equivalents, including short-term investments of $3,008 and $1,520 S 4,046 $ 2,210 Inventory 8.B01 8.282 Assets of discontinued operations 322 1,058 Other current assels 1,161 2,074 Talal current assets 14. 130 13,624 Property and equipment Land 6.125 6,127 Buildings and improvements 27,059 20,613 Fixtures and equipment 5,347 5,329 Computer hardware and software 2.617 2,552 Construction-in-progress 315 424 Accumulated depreciation (16,246) (15,093) Property and equipment, net 25,217 25,952 Noncurrent assets of discontinued operations 75 717 Other noncurrent assets 840 879 Total assets 40.262 5 Liabilities and shareholders' investment Accounts payable 7 418 $ 7.759 Accrued and other current liabilities 4.236 3.783 Current portion of long-term debt and other bortonings 815 91 Liabilities of discontinued operationis 150 103 Total current liabilities 12.622 11.736 Long term debt and other borrowings 11,945 12.634 Deferred income taxes 823 1. 160 Noncurrent liabilities of discontinued operations 18 193 Other noncurrent liabilities 1.897 1.452 Total noncurrent Isabilities 14 883 15,439 Sharchalder investment Common stock 50 53 Additional paid in capital 5348 4,899 Retained earings 8.188 9.644 Accumulated other compreensive lass Pension and other benefit liabilities a) (501) Currency translation adjustment and cash flow hedges (41) Total shareholders Investment 12.957 13.997 Total liabilities and shareholders' Investment 40.2025 41, 172 Common Stock Phord GOODGOOD are se 20 22517 sedan 29 2015 59213937 and Posted Stock Ads 001 0 2016 2015 Consolidated Statements of Shareholders Investment Retained Earnings 13.155 S 1,971 (1,051) (1.476) 12.599 $ (1 636) Common Stock Additional Stock Par Paid-in (millions, except footnotes) Shares Value Capital February 2, 2013 145.3 $ 54 S 3,925 5 Nel camings Other comprehensive income Dividends declared Repurchase of stock (219) (2) Stock options and awards 9.5 1 545 February 1, 2014 632.9 $ 53 4,470 $ Nel loss Other comprehensive loss Dividends declared Repurchase a stock (0.8) Stock options and awards 8.1 429 January 31, 2015 640 2 $ 53S 1899 s Net eamings Other comprehensive income Dividends declared Repurchase of stock (447) Stock options and awards 6.7 449 January 30, 2016 602.2 S SUS 5,348 S Dividends declared porshare were $2.20 $199.5 55 2015 2014 and 10 repede See accompanying Notes to Cooted Financial Sa Accumulated Other Comprehensive Income/(Loss) Total (576) S 16,558 1,971 315) (315) (1,051) (1,478) 546 |(891) $ 16, 231 (1.836) 292 292 (1.273) (48) 429 (599) S 13.997 3.383 (30) (30) 11.378) 13,445) 450 (829) 5 12,957 (1.273) (46) HIIL 9.644 $ 3362 IN (1.378) (3.441) 2,18 33 Recorded Assets and Liabilities January 30 2016 77 S Assets and Liabalties of Discontinued Operations millions) Income tax benefit Receivables from Canada Subsidiaries Receivables under the debtorin possession credit facility Total assets 320 January 31, 2015 1.430 326 19 1.775 397 Accrued liabilises Total liabilities Represents and accounts recavalo romanet BURGOS 171 171 296 295 Fair Value Measurements - Recurring Basis Fair Value at January 30, January 31, 2016 2015 Pricing Category Lavel 1$ 3,008 1,620 Level 2 Level 1 Level 3 12 32 19 38 43 (millions) Assets Cash and cash equivalents Short-term investments Other current assers Interest rate swaps Prepaid forward contracts Beneficial interest asset Other noncurrent assets Interest rate swaps Beneficial interest asset Liabilities Other current liabilhes Interest rate swaps Other noncurrent liabilities Interest rate swaps Son Noto 21 for additional information on interest rate swaps 27 65 Level 2 Level 3 12 31 Level 2 Level 2 Valuation Technique 13. Other Current Assets Other Current Assets January 30, January 31 (milions) 2016 2015 Income tax and other receivables 352 $ 426 Vendor income receivable 379 426 Prepaid expenses 214 231 Pharmacy-related receivables 48 274 Pharmacy and clinic assets held for sale 510 Other 188 207 Total 1.161 S 2,074 We did not set outstanding pharmacy related receivables as part of the pharmacies and clinics transaction See Nike for more information on the pharmacies and caries transaction Seo Note 5 for addtional information relating to the pharmacy and anie a Sett hold for sale 48