Real World Case 3-7 (Static) Balance sheet and significant accounting policies disclosure; Walmart [LO3-2, 3-3, 3-4, 3-8]

The balance sheet and disclosure of significant accounting policies taken from the 2017 annual report of Walmart Stores Inc. appear below. Use this information to answer the following questions:

WAL-MART STORES, INC. Consolidated Balance Sheets ($ in millions except per share data)
	As of January 31,
		2017				2016
Assets
Current assets:
Cash and cash equivalents	$	6,867			$	8,705
Receivables (net)		5,835				5,624
Inventories		43,046				44,469
Prepaid expenses and other		1,941				1,441
Total current assets		57,689				60,239
Property and equipment:
Property and equipment		179,492				176,958
Less accumulated depreciation		(71,782	)			(66,787	)
Property and equipment (net)		107,710				110,171
Property under capital leases:
Property under capital lease and financing obligations		11,637				11,096
Less accumulated amortization		(5,169	)			(4,751	)
Property under capital leases and financing obligations (net)		6,468				6,345
Goodwill		17,037				16,695
Other assets and deferred charges		9,921				6,131
Total assets	$	198,825			$	199,581
Liabilities, Redeemable Noncontrolling Interest and Equity
Current liabilities:
Short-term borrowings	$	1,099				2,708
Accounts payable		41,433				38,487
Accrued liabilities		20,654				19,607
Accrued income taxes		921				521
Long-term debt due within one year		2,256				2,745
Capital lease and financing obligations due within one year		565				551
Total current liabilities		66,928				64,619
Long-term debt		36,015				38,214
Long-term capital lease and financing obligations		6,003				5,816
Deferred income taxes and other		9,344				7,321
Commitments and contingencies Equity:
Common stock		305				317
Capital in excess of par value		2,371				1,805
Retained earnings		89,354				90,021
Accumulated other comprehensive income (loss)	$	(14,232	)			(11,597	)
Total Walmart shareholders equity		77,798				80,546
Nonredeemable noncontrolling interest		2,737				3,065
Total equity		80,535				83,611
Total liabilities, redeemable noncontrolling interest and equity	$	198,825				199,581

Source: Wal-Mart NOTES TO CONSOLIDATED FINANCIAL STATEMENTS WAL-MART STORES, INC. 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 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 substantially all of 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, 2017 and January 31, 2016, 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. Digital retail sales include shipping revenue and are recorded upon delivery to the customer. Customer purchases of shopping cards, to be utilized in our stores or on our e-commerce websites, 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. Source: Wal-Mart Required: 1. Does Walmart separately report current assets versus long-term assets, and current liabilities versus long-term liabilities? 2. What amounts did Walmart report for the following items for 2017: (Enter your answers in millions.)

1. Total assets

2. Current assets

3. Current liabilities

4. Total equity

5. Retained earnings

6. Inventory

3. What is Walmarts largest current asset? What is its largest current liability? 4. Compute Walmarts current ratio for 2017. (Round your answer to 2 decimal places.) 5. Identify the following items from the summary of significant accounting policies:

1. Does the company have any securities classified as cash equivalents?

2. What cost method does the company use for its U.S. inventory?

3. When does the company recognize revenue from service transactions?