Refer to the financial statements of The Home Depot in Appendix A. (Note: Fiscal 2016 for The Home Depot runs from February 2016 to January 29, 2017. As with many retail companies, The Home Depot labels the period "Fiscal 2016" even though it ends in the 2017 calendar year. The label "Fiscal 2016" is appropriate because Fiscal 2016 includes 11 months from the 2016 calendar year. The Home Depot explains its choice of fiscal period in Note to its financial statements.) Required: 1. How much did The Home Depot owe for salaries and related expenses of January 29, 2017 Was this on increase or decrease from the previous year? 51484 million Increase) O $1484 million (Decrease) O $7000 million (Increase) 57,000 million (Decrease) 2. Refer to the Revenues note in the Summary of Significant Accounting Policies that follows The Home Depot's statements of cash flowe: How does the company account for customer payments received in advance of providing services? o the funds are not deposited in the bank account and no entry is recorded The revenue deferred until the goods or services are provided to the customer Record the prepayment as revenue O the funds are deposited in the bank account and no entry is recorded 3. What jutting journal entry must The Home Depot make when it provides services paid by gift card? Odebir Deferred Revenue, credit Net Sales Revenue debit Net Sales Revenue, credit Deferred Revenue debit Cash, credit Deferred Revenue O debit Deferred Revenue, credit Cash THE HOME INC. AND SUBSIDIARIES CB dBalance Sheets January 29, 2017 "Fiscal 2016 January 31, 2016 "Fiscal 2015" $ 2,538 2,029 12,549 608 17,724 40,426 18,512 21.914 2,093 1,235 $42.966 $ 2.216 1.890 11,809 569 16,484 39,266 17,075 22.191 2.102 1.196 $41,973 amounts in millions, except share and per share data ASSETS Current Assets Cash and Cash Equivalents Receivables, net Merchandise Inventories Other Current Assets Total Current Assets Property and Equipment, at cost Less Accumulated Depreciation and Amortization Net Property and Equipment Goodwill Other Assets Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Short Term Debt Accounts Payable Accrued Salanes and Related Expenses Sales Taxes Payable Deferred Revenue Income Taxes Payable Current Inwallments of Long Term Debt Other Accrued Expenses Total Current Liabilities Long Term Debt, excluding current installments Other Long Term Liabilities Defenved Income The Totd Liabilities STOCKHOLDERS' EQUITY Common Stock, par value 0.05: Wuthorized: 10 billion shares, issued: 1.776 billion shares January 29, 2017 and 1.772 billion shares at January 31, 2016 outstanding: 1.203 billion sharest January 29, 2017 and 1.252 billion shares at January 31, 2016 Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock, at cost, 573 million shares at January 29, 2017 and 520 million shares at January 31, 2016 Total Stockholders' Equity Total Liabilities and Stockholders' Equity $. 710 7.000 1484 Sos 1.669 25 542 2,195 14,133 22,349 1,855 296 38.633 $ 350 6,565 1.515 176 1,566 34 27 1,941 12.524 2,789 1,965 379 25.657 88 88 9,787 35,519 (867 (40,194) 9,347 30.973 (898 (33.194 $42,966 6,316 $41,973 See ting Now Consolidate Final Statement THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Statements of Earnings Fiscal Year Ended Jan. 31, 2016 "Fiscal 2015" $88,519 58,254 Feb. 1. 2015 "Fiscal 2014" $83,176 54,787 28,389 30,265 16,801 1,690 18,491 11.774 16,280 1,640 17.920 10,469 Jan. 29, 2017 amounts in millions, except per share data "Fiscal 2016" NET SALES $94,595 Cost of Sales 62.282 GROSS PROFIT 32,313 Operating Expenses Selling. General and Administrative 17,132 Depreciation and Amortization 1.754 Total Operating Expenses 18.886 OPERATING INCOME 13,427 Interest and Other (Income) Expense: ferest and Investment Income (36) Interest Expense 972 Interest and Othernet 936 EARNINGS BEFORE PROVISION FOR INCOME TAXES 12.491 Provision for Income Taxes 4,534 NET EARNINGS $ 7,957 Weighted Average Common Shares 1.229 BASIC EARNINGS PER SHARE $ 6.47 Diluted Weighted Average Common Shares 1.214 DILUTED EARNINGS PER SHARE $ 6.45 (1) Fiscal year ended January 29, 2017 January 31, 2016, and February 1, 2015 mclude 52 ww Swing Maternited Financial Seh (337) 830 493 (166) 919 753 11.021 4.012 $ 7.009 1.277 $5.49 1.283 9.976 3.631 $ 6,345 1.338 $4.74 1.346 S 5.46 S 4.71 THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income Fiscal Year Ended: Jan 31, 2016 "Fiscal 2015" $7,009 Feb. 1. 2015 Fiscal 2011 S6 345 (412) amounts in millions Jan. 29, 2017 Fiscal 2016 Net Earnings $7.957 Other Comprehensive Income (Loss): Foreign Currency Translation Adjustments (3) Cash Flow Hedges, net of tax 34 Other Total Other Comprehensive Income (Loss) 31 COMPREHENSIVE INCOME $7,988 Oj Facal years oded January 29, 2017 January 31, 2016, and Felvary 1, 2015 Include 52 week (510) 11 (34) 1 (498) (446) $6,563 $5.847 THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity Stockholders' Equity $12,522 6,345 122 136 11 1 1 1 1 11 (510) 11 225 con 11113 (7.000) (2.530) 1 $9,322 7,009 73 Accumulated Other Common Stock Paid In Retained Comprehensive Treasury Stock amounts in millions, except per share data Shares Amount Capital Earnings Income (LA) Shares Amount Balance, February 2, 2014 1,761 $88 $8,402 $23,180 $ 46 (381) $(19.194) Net Earnings 6,345 Shares Issued Under Employee Stock Plans 7 122 Tax Effect of Stock-Based Compensation 136 Foreign Currency Translation Adjustments (510) Cash Flow Hedges, net of tax 11 Stock Options, Awards and Amortization 225 of Restricted Stock Repurchases of Common Stock (80) (7,000) Cash Dividends ($1.88 per share) (2.530) Other Balance. February 1, 2015 1,768 S88 $8.885 $26.995 $(452) (461) $(26,194) Net Earnings 7,000 Shares Issued Under Employee Stock Plans 73 Thx Effect of Stock-Based Compensation 145 Foreign Currency Translation Adjustments (412) Cash Flow Hedges, net of tax (34) Stock Options, Awards and Amortization 2:44 of Restricted Stock Repurchases of Common Stock (59) (7.000 Cash Dividends (52.36 per sharey (3.031) Balance, January 31, 2016 1.772 $8 39,347 $30,973 $(898) (520) $(33.1940 Net Earnings 7.957 Shares Issued Under Employee Stock Plans 76 Tax Effect of Stock-Based Compensation 97 Foreign Currency Translation Adjustment (3) Cash Flow Hedges, net of tax Stock Options, Awards and Amortization 267 of Restricted Stock Repurchases of Common Stock (53) (7.00) Cash Dividends (52.76 per share) (3,404) Other S. 1,776 59,787 Balance. January 29, 2017 $35,519 $1867) (573) $(40,194 See mwing Notes Cold Final Statem. 112 111 145 (412) (34) 11 244 - 1 (7.000 (3,031) $ 6,316 7957 76 1 LFL 97 111111 ) 34 262 IT LI 11 I! (7.0%) (3.404) TITS $ 4,133 THE HOME DEPOT, INC. AND SUBSIDIARIES Comolidated Statements of Cash Flows Fiscal Year Ended Jan. 31, 2016 "Fiscal 2015" Feb 1, 2015 Fiscal 2014" $6,345 $7,009 1.863 244 (144) 1.786 225 (323) (181) (546) (5) 888 109 154 15 (33) 9,373 (81) (124) (199) 244 146 168 159 (104) 8,242 (1.503) (1442) Jan. 29, 2017 Fiscal 2016" moin million CASH FLOWS FROM OPERATING ACTIVITIES: Net Earnings $7.957 Reconciliation of Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 1,973 Stock-Based Compensation Expene 267 Gain on Sales of Investments Changes in Assets and Liabilities, net of the effects of acquisitions Receivables, net (138) Merchandise Inventories (769) Other Current Assets (48) Accounts Payable and Accrued Expenses 446 d Revenue 99 Income Taxes Payable 109 Deferred Income Thes (117) Other Net Cash Provided by Operating Activities 9.783 CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures, set of $179, $165 and $217 of non-cash capital (1,621) expenditures in fiscal 2016, 2015 and 2014, respectively Proceeds from Sales of Investments Payments for Businesses Acquired.net Proceeds from Sales of Property and Equipment 38 Net Cash Used in Investing Activities (1.583) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Short-Term Borrowings, net 360 Proceeds from Long-Term Borrowings, net of discounts 4.959 Repayments of Long-Term Debt (3,045) Repurchases of Common Stock (6,880) Proceeds from Sales of Common Stock 218 Cash Dividends Paid to Stockholders (3,404) Other Financing Activities Net Cash Used in Financing Activities (7.870) Change in Cash and Cash Equivalents 330 Effect of Exchange Rate Changes on Cash and Cash Equivalents (8) Cash and Cash Equivalents at Beginning of Year 2,216 Cash and Cash Equivalents at End of Year $2,538 SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR: Interest, net of interest capitalized $924 Tocome Taxes $4,623 (Flacalar ended January 29, 2017 January 31, 2016, and February 1, 2015 include 52 weeks See aming Notes le Consolidar Final Strmenis 144 (1666) 323 (200) 48 (1.271) (2.982) 0 3.991 (39) (7.000) 228 (3.031) 290 1.981 (39) (7,000) 252 (2.530) (25) (7,071) (100) (106) 1.929 S1.723 (78) (5.787 604 (111) 1.723 52.216 S874 53.853 $ 782 $3,435