Following are the financial statements of Target Corporation from its FY2015 annual report.

Two-Year-Ahead Forecasting of Financial Statement Following are the nancial statements of Target Corporation from its FY2015 annual report. Target Corporation Consolidated Statements of Operations 12 Months Ended $millions Jan. 30. 2016 Jan. 31, 2015 Feb. 01. 2014 Sales 74,785 72,618 71,279 Cost of sales 52,723 51,278 50,039 Gross margin 22,062 21,340 21,240 Selling, general and administrative expenses 14,882 14,676 14,465 Depreciation and amortization 2,213 2,129 1,996 Gain on sale (620) - (319) Earnings from continuing operations before interest expense & income taxes 5,587 4,535 5,170 Net interest expense 607 882 1,049 Earnings from continuing operations before income taxes 4,980 3,653 4,121 Provision for income taxes 1,619 1,204 1,427 Net earnings from continuing operations 3,361 2,449 2,694 Discontinued operations, net of tax 42 (4.085) (723) Net earnings (loss) 3403 (1.635) 1.971 Target Corporation Consolidated Statements of Financial Position $millions Jan . 30 , 2016 Jan . 31 , 2015 Assets Cash and cash equivalents , inc . short-term investments of $3 , 008 and $ 1 , 520 $ 4, 046 $2 , 210 Inventory 8 , 601 8 , 282 Assets of discontinued operations 322 1 , 058 Other current assets 1 , 161 2, 074 Total current assets 14 , 130 13, 624 Property and equipment , net 25, 417 25, 952 Noncurrent assets of discontinued operations* 75 717 Other noncurrent assets* 840 879 Total assets $40, 462 $41 , 172 Liabilities and Shareholders' investment* Accounts payable* $ 7 , 418 $7 , 759 Accrued expenses and other current liabilities 4 , 236 3 , 783 Current portion of LT debt and other borrowings 815 91 Liabilities of discontinued operations 153 103 Total current liabilities 12, 622 1 1 , 736 Long-term debt and other borrowings 71 , 945 12 , 634 Deferred income taxes 823 1 , 160 Noncurrent liabilities of discontinued operations* 18 193 Other noncurrent liabilities 1 , 897 1 , 452Total noncu rrent liabilities 14,683 15,439 Shareholders' investment Common stock 50 53 Additional paid~in-capital 5,348 4,899 Retained earnings 8,388 9,644 Accumulated other comprehensive loss Pension and other benefit liabilities (588) (561) Currency translation adjustment and cash flow hedges (41) (33) Total shareholders' investment 13.157 13.997 Total liabilities and shareholders' investment $40'462 $41'172 We forecast Target's income statement using the following forecast assumptions for both years: Sales (growth rate) 4% Cost of sales/Sales 70.5% Selling, general and administrative expenses/Sales 19.9% Depreciation and amortization (% of prior year PPE, net) 8.4% Net interest expense No change Provisions for income taxes/Pretax income 32.5% Assume Target disposes of the net assets from discontinued operations (assets less liabilities) in FY2016 for proceeds of $350 million. Instructions: Forecast Target's fiscal year ended 2016 and 2017 income statements. . Use the same forecasting assumptions for both years. . Round forecasts to $ millions. . Use rounded figures for subsequent forecast calculations. . Do not use negative signs with your answers in the income statement. Hint: Forecasted FY2016 gain on sale is computed as proceeds from the diSposal of net assets from discontinued operations minus net assets from discontinued operations ($350 million - $226 million). Forecast $0 for gain on sale in FY2017. Target Corporation Consolidated Statements of Operations $ millions FY2016 Est. FY2017 Est. Sales $ 0 X $ 0 X Cost of sales 0 X 0 X Gross margin 0 X 0 X Selling, general and administrative expenses 0 X 0 X Depreciation and amortization 0 X 0 X Gain on sale 0 X 0 V Earnings from continuing operations before interest and tax 0 X 0 X Net interest expense 0 X 0 X Earnings from continuing operations before tax Provisions for income taxes Net earnings 0 0 O 0 0 0 We forecast Target's financials using the following forecast assumptions for both year: Inventory/Sales Other current assets/Sales Other noncurrent assets/Sales Accounts payable/Sales Accrued and other current liabilities/Sales Deferred income taxes/Sales Other noncurrent liabilities/Sales CAPEX/Sales Dividends/Net income Common stock Additional paid-in capital Accumulated other comprehensive loss Current Maturities L-T Debt for 2016 Current Maturities L-T Debt for 2017 Current Maturities L-T Debt for 2018 Assume Target buys back common stock at $2,000 million in FY2016 and retires the stock. 11.7% 1.6% 1.1% 10.1% 5.7% 1.1% 2.6% 1.90% 40.5% No change No change No change $751 $2,251 $201 (Hint: Retained earnings are reduced by the cost of the stock buy back.) No stock buybacks happen in FY2017. Instructions: Forecast Target's fiscal year ended 2016 and 2017 balance sheets. . Use the same forecasting assumptions for both years. . Round forecasts to $ millions. . Use rounded figures for subsequent forecast calculations. . Do not use negative signs with your answers in the income statement. Target Corporation Consolidated Statements of Financial Position $ millions FY2016 Est. FY2017 Est. Assets Cash and cash equivalents, inc. short-term investments $ 0 X $ 0 X Inventory 0 X 0 X Other current assets 0 X 0 X Total current assets 0 X 0 X Property and equipment, net 0 X 0 X Other noncurrent assets 0 X 0 X Total assets $ 0 X $ 0 X Liabilities and Shareholders' investment Accountspayable $ 0 X $ 0 X Accrued expenses and other current liabilities 0 X 0 X Current portion of LT debt and other borrowings U U Total current liabilities Long-term debt and other borrowings O Deferred income taxes U O x Other noncurrent liabilities O Total noncurrent liabilities O Shareholders' investment Common stock O O Additional paid - in capital O Retained earnings U O Accumulated other comprehensive loss U O Total shareholders' investment O U Total liabilities and shareholders' investment O X O Check