P12-34. Two-Year-Ahead Forecast of Financial Statements Following are the financial statements of Target Corporation from its fiscal year ended February 2, 2019. TARGET CORPORATION Consolidated Statements of Financial Position For Fiscal Years Ended ($ millions) Feb. 2, 2019 Feb. 3, 2018 Assets Cash and cash equivalents $1,556 $2,643 Inventory..... 9,497 8,597 Other current assets. 1,466 1,300 Total current assets 12,519 12,540 Property and equipment Land 6,064 6,095 Buildings and improvements 29,240 28,131 Fixtures and equipment 5,912 5,623 Computer hardware and software 2,544 2,645 Construction-in-progress 460 440 Accumulated depreciation (18,687) (18,398) Property and equipment, net 25,533 24,536 Operating lease assets.. 1,965 1,884 Other noncurrent assets. 1,273 1,343 Total assets ... $41,290 $40,303 Liabilities and shareholders' investment Accounts payable. $9,761 $8,677 Accrued and other current liabilities .. 4,201 4,094 Current portion of long-term debt and other borrowings.. 1,052 281 Total current liabilities... 15,014 13,052 Long-term debt and other borrowings 10,223 11,117 Noncurrent operating lease liabilities. 2,004 1,924 Deferred income taxes.. 972 693 Other noncurrent liabilities 1,780 1,866 Total noncurrent liabilities.. 14,979 15,600 Shareholders' investment Common stock ... 43 45 Additional paid-in capital. 6,042 5,858 Retained earnings 6,017 6,495 Accumulated other comprehensive loss. (805) (747) Total shareholders' investment..... 11,297 11,651 Total liabilities and shareholders' investment. $41,290 $40,303 Feb. 3, 2018 $72,714 51,125 15,140 Jan. 28, 2017 $70,271 49,145 14,217 TARGET CORPORATION Consolidated Statements of Operations 12 Months Ended ($ millions) Feb. 2, 2019 Total revenue $75,356 Cost of sales. 53,299 Selling, general and administrative expenses 15,723 Depreciation and amortization (exclusive of depreciation included in cost of sales).. 2,224 Operating income. 4,110 Net interest expense.. 461 Net other (income) expense... (27) Earnings from continuing operations before income taxes. 3,676 Provision for income taxes.... Net earnings from continuing operations 2,930 Discontinued operations, net of tax 7 Net earnings. $ 2,937 2,225 4.224 653 (59) 3,630 722 2,045 4,864 991 (88) 3,961 1,295 2,666 68 $ 2,734 746 2,908 6 $ 2,914 Required Forecast Target's income statements and balance sheets for the fiscal years ended February 2020 and 2021. Combine the forecasted property and equipment accounts into one account, titled Property and equipment, net. For cost of goods sold and for selling, general and administrative expenses, use the historic percent of revenue for forecasts. Use the following assumptions and data. Assumptions ($ millions) Inventory as % Total revenue.. 12.6% Other current assets as % Total revenue. 1.9% Operating lease assets as % Total revenue. 2.6% Other noncurrent assets as % Total revenue. 1.7% Accounts payable as % Total revenue.. 13.0% Accrued and other current liabilities as % Total revenue 5.6% Noncurrent operating lease liabilities... No change Deferred income taxes as % Total revenue. 1.3% Other noncurrent liabilities as % Total revenue 2.4% Common stock.. No change Additional paid-in capital. No change Accumulated other comprehensive loss.. No change CAPEX/Current period total revenue 4.70% Dividends for year ended February 2019 $1,335 Dividend payout.. 45.5% Forecasted depreciation expense for year ended February 2020 $2,565 Forecasted depreciation expense for year ended February 2021 $2,778 Amortization expense.. $0 Net interest expense.. No change Net other (income) expense... No change Stock buybacks per year $0 Tax rate (as % pretax income) 20% Long term debt, current portion at February 2019 $1,052 Long term debt, current portion at February 2020 $1,002 Long-term debt, current portion at February 2021 $1,094