Target Corporation prepares its financial statements according to U$.$S$.$ GAAP. Target's financial statements and disclosure notes for the year ended February $1,2020,$ are available here. This material also is available under the Investor Relations link at the company's website $($

www$.$target.com$).$ Target does not have investments in stock or bonds. However, CVS Health Corporation, which purchased Target's pharmacy and clinical business during $2015,$ does have some investments. Access CVS$\text{'}$s $201910K$ at

investors.cvshealth.com to answer the following questions.

Required:

Regarding CVS$\text{'}$s investments in debt securities:

a$.$ Turn to Note $1$: Significant accounting policies. What approach is CVS using to account for its investments in debt securities $-$are they HTM$,$ TS$,$ or AFS?

b$.$ Turn to Note $3$: Investments. What is the total amount of CVS$\text{'}$s investments as of $12/31/2019,$ and where are those investments shown on CVS$\text{'}$s balance sheet?

c$.$ What is the total amount of CVS$\text{'}$s debt investments that are classified as available$-$for$-$sale as of $12/31/2019,$ and how much of that total is amortized cost as opposed to accumulated fair value adjustment that account for unrealized gains and losses?

d$.$ Turn to Note $4$: Fair Value. What is the amount of CVS$\text{'}$s investments in debt securities that is categorized as Level $1,$ Level $2,$ and Level $3$ of the fair value hierarchy?

Per Note $1,$ CVS has equity$-$method investments in SureScripts, LLC$,$ and in Heartland Healthcare Services. CVS indicates that those investments are immaterial for the year ended December $31,2019.$ Assuming that the Heartland investment is material,

a$.$ How would Heartland's earnings affect CVS$\text{'}$s income statement?

b$.$ How would Heartland's earnings affect CVS$\text{'}$s balance sheet?

Complete this question by entering your answers in the tabs below.

Req $1$A Req $1B$ Req $1C$ Req $1D2$ R

Turn to Note $1$: Significant accounting policies. What approach is CVS using to account for its investments in debt securitiesare they HTM$,$ TS$,$ or AFS?

Per Note $1,$ CVS classifies these investments as

available$-$for$-$sale securities