The 2010 and 2009 income statements and balance sheets (asset section only) for Target Corpora-tion follow, along with its footnote describing Targets accounting for property and equipment. Targets cash flow statement for fiscal 2010 reported capital expenditures of $2,129 million and disposal proceeds for property and equipment of $69 million. No gain or loss was reported on property and equipment disposals. In addition, Target acquired property and equipment through non-cash acquisitions not reported on the statement of cash flows.

Required: Prepare journal entries to record the following for 2010:

i. Depreciation expense

ii. Capital expenditures

iii. Disposal of property, plant and equipment

iv. Repair and maintenance costs

v. Impairments and write-downs (Assume that impairments and write-downs reduce the property and equipment account, rather than increasing accumulated depreciation.)

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over estimated useful lives or lease terms if shorter. We amortize leasehold improvements purchased after the beginning of the initial lease term over the shorter of the assets useful lives or a term that includes the original lease term, plus any renewals that are reasonably assured at the date the leasehold improvements are acquired. Depreciation expense for 2010, 2009 and 2008 was $2,060 million, $1,999 million and $1,804 million, respectively. For income tax purposes, accelerated depreciation methods are generally used. Repair and maintenance costs are expensed as incurred and were $726 million in 2010, $632 million in 2009 and$609 million in 2008. Facility pre-opening costs, including supplies and payroll, are expensed as incurred.

Estimated Useful LivesLife (in years)

Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8-39

Fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-15

Computer hardware and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4-7

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the assets carrying value may not be recoverable. Impairments of $28 million in 2010, $49 million in 2009 and $2 million in 2008 were recorded as a result of the reviews performed. Additionally, due to project scope changes, we wrote off capitalized construction in progress costs of $6 million in 2010, $37 million in 2009 and $26 million in 2008.

Consolidated Statements of Operations

(millions, except per share data)2010 2009

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$65,786

$63,435

Credit card revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,604

1,922

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67,390

65,357

Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45,725

44,062

Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . .

13,469

13,078

Credit card expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

860

1,521

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,084

2,023

Earnings before interest expense and income taxes . . . . . . . . . . . . . . . .

5,252

4,673

Net interest expense

Nonrecourse debt collateralized by credit card receivables. . . . . . . . .

83

97

Other interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

677

707

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

(3)

Net interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

757

801

Earnings before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,495

3,872

Provision for income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,575

1,384

Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 2,920 $2,488

Consolidated Statements of Financial Position (Asset Section Only)

(millions, except footnotes)

January 29, 2011

January 30,2010

Assets

Cash and cash equivalents, including marketable

securities of $1,129 and $1,617 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 1,712

$ 2,200

Credit card receivables, net of allowance of $690 and $1,016. . . . . . . 6,153

6,966

Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,596

7,179

Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,752

2,079

Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,213

18,424

Property and equipment

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,928

5,793

Buildings and improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23,081

22,152

Fixtures and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,939

4,743

Computer hardware and software . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,533

2,575

Construction-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

567

502

Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11,555)

(10,485)

Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25,493

25,280

Other noncurrent assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

999

829

Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $43,705 $44,533