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 D LIABILITIES D1 Targets Consolidated Statement of Financial Position (its balance sheet) discloses its current assets and current liabilities What are the four components of Targets current liabilities Are current assets sufficient to cover current liabilities What is the current ratio for the year ended January 30, 2016 How does the ratio compare with the prior year Why might a company want to avoid having its current ratio be too low Too high D2 Disclosure Note 2 discusses Targets accounting for gift card sales Disclosure Note 18 indicates the amount of gift card liability that is recognized in Targets balance sheet By how much did Targets gift card liability change between January 30, 2016 and January 31, 2015 Page B 3How would the following affect Targets gift card liability (indicate increase, decrease, or no change for each) Sale of a gift card Redemption of a gift card (the holder using it to acquire goods or services) Increase in breakage estimated for gift cards already sold D3 Disclosure Note 19 discusses Targets accounting for a data breach in 2013, when an intruder stole certain payment card and other guest information from our network What is Targets approach for accruing losses for litigation claims associated with the data breach Is their approach appropriate Prepare a journal entry to record Targets recognition of new expenses associated with the data breach litigation for the fiscal year ended January 30, 2016 Prepare a journal entry to record Targets reduction of its liability associated with the data breach litigation for the fiscal year ended January 30, 2016 D4 Calculate the debt to equity ratio for Target at January 30, 2016 The average ratio for companies in the General Retailers industry sector in a comparable time period was 1 6 What information does your calculation provide an investor D5 Calculate Targets times interest earned ratio for the year ended January 30, 2016 The coverage for companies in the General Retailers industry sector in a comparable time period was 10 6 What does your calculation indicate about Targets risk

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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 D: LIABILITIES

D1.		Targets Consolidated Statement of Financial Position (its balance sheet) discloses its current assets and current liabilities. What are the four components of Targets current liabilities? Are current assets sufficient to cover current liabilities? What is the current ratio for the year ended January 30, 2016? How does the ratio compare with the prior year? Why might a company want to avoid having its current ratio be too low? Too high?
D2.		Disclosure Note 2 discusses Targets accounting for gift card sales. Disclosure Note 18 indicates the amount of gift card liability that is recognized in Targets balance sheet. By how much did Targets gift card liability change between January 30, 2016 and January 31, 2015? Page B-3How would the following affect Targets gift card liability (indicate increase, decrease, or no change for each): Sale of a gift card Redemption of a gift card (the holder using it to acquire goods or services) Increase in breakage estimated for gift cards already sold
D3.		Disclosure Note 19 discusses Targets accounting for a data breach in 2013, when an intruder stole certain payment card and other guest information from our network. What is Targets approach for accruing losses for litigation claims associated with the data breach? Is their approach appropriate? Prepare a journal entry to record Targets recognition of new expenses associated with the data breach litigation for the fiscal year ended January 30, 2016. Prepare a journal entry to record Targets reduction of its liability associated with the data breach litigation for the fiscal year ended January 30, 2016.
D4.		Calculate the debt to equity ratio for Target at January 30, 2016. The average ratio for companies in the General Retailers industry sector in a comparable time period was 1.6. What information does your calculation provide an investor?
D5.		Calculate Targets times interest earned ratio for the year ended January 30, 2016. The coverage for companies in the General Retailers industry sector in a comparable time period was 10.6. What does your calculation indicate about Targets risk?