Question
Target Corporation prepares its financial statements according to U.S. GAAP. Targets financial statements and disclosure notes for the year ended January 30, 2016, are available
Target Corporation prepares its financial statements according to U.S. GAAP. Targets financial statements and disclosure notes for the year ended January 30, 2016, are available in Connect. This material is also available under the Investor Relations link at the companys website (www.target.com). This case addresses a variety of characteristics of financial statements prepared using U.S. GAAP. Questions are grouped in parts according to various sections of the textbook.
PART B: PROPERTY, PLANT, AND EQUIPMENT AND INTANGIBLE ASSETS
| B1. |
| What categories of property, plant, equipment, and intangible assets does Target report in its January 30, 2016, balance sheet? |
| B2. |
| How much cash was used in the fiscal year ended January 30, 2016, to purchase property and equipment? How does this compare with purchases in previous years? |
| B3. |
| Page B-2Do you think a company like Target would have significant research and development costs or capitalized interest related to self-constructed assets? Explain. |
| B4. | What is Targets fixed-asset turnover ratio for the fiscal year ended January 30, 2016? What is the ratio intended to measure? | |
| B5. | Compare the property and equipment listed in the balance sheet with the list in Note 14. What are the estimated useful lives for recording depreciation? Why is land not listed in Note 14? | |
| B6. | Which depreciation method does Target use for property and equipment for financial reporting? Which depreciation method is used for tax purposes? Why might these methods be chosen? | |
| B7. | How does Target record repairs and maintenance expense? | |
| B8. | How does Target account for impairment of property and equipment? Were any impairments recorded for the year ended January 30, 2016? If so, what was the amount, and what were the reasons for the impairments? | |
| B9. | From Notes 15 and 16, what was the amount of intangible assets for the year ended January 30, 2016? Were any impairments related to intangible assets recorded for the year ended January 30, 2016? If so, what was the amount and, what were the reasons for the impairments? |
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