The website for this text contains Walmart$$s January $31,2021,$ Form $10-$K$.$ You should read the management discussion and analysis $($MD&A$),$ financial statements, and notes to the financial statements, especially Note $1,$Summary of Significant Accounting Policies.$$

Required: Revenue Recognition

a$.$

Does Walmart recognize all of its revenue at a point in time? If not, how is it recognized?

Required: Cost of Sales and Inventory

b$.$

What costing method does Walmart use to determine cost of sales and inventory?

c$.$

How does Walmart handle the requirement to report inventory at lower$-$of$-$cost$-$or$-$market?

d$.$

Does Walmart have a large LIFO reserve? If not, why?

e$.$

Walmart receives discounts from suppliers because it purchases large volumes of merchandise. Is this reported as other income or accounted for in another way?

Required: Working Capital

f$.$

Operations create working capital accounts. Which of Walmart$$s working capital accounts are the most financially significant?

g$.$

Does Walmart$$s working capital management yield a positive or negative net investment in working capital? Is this a good situation for Walmart$$s profitability? Why?

Required: Income Taxes

h$.$

Note $9$ to Walmart$$s consolidated financial statements presents a substantial amount of income tax$-$related information, including an effective income tax rate reconciliation. Which reconciling items appear to be relatively persistent?

i$.$

What is the effect of Walmart$$s generation of income in foreign jurisdictions on the effective tax rate? Is the effect changing over time?

j$.$

What are the two largest deferred tax assets? Explain how they have arisen and why they are assets.

k$.$

What is the $$valuation allowance$?$ It has increased during the two$-$year period. What is the implication of this increase for earnings?

l$.$

Why does Walmart report a deferred tax liability for property and equipment? Speculate whether Walmart expanded or contracted based on the information in this section of the tax note.

Required: Pensions

m$.$

What kind of pension plans does Walmart have, and how are earnings affected by each?