Walmart Stores, Inc , is the world s largest retailer A large portion of the premises that the company occupies are leased Its financial statements and disclosure notes revealed the following information Balance Sheet ($ in millions) 2011 2010 Assets Property Property under capital lease $5,509 $5,669 Less Accumulated amortization (2,780) (2,906) Liabilities Current liabilities Obligations under capital leases due within one year 336 346 Long term debt Long term obligations under capital leases 3,150 3,170 Required 1 Discuss some possible reasons why Walmart leases rather than purchases most of its premises 2 The net asset property under capital lease has a 2011 balance of $2,729 million ($5,509 2,780) Liabilities for capital leases total $3,486 ($336 3,150) Why do the asset and liability amounts differ 3 Prepare a 2011 summary entry to record Walmart s lease payments, which were $600 million 4 What is the approximate average interest rate on Walmart s capital leases (Hint See Req 3) Walmart Stores, Inc , is the world's largest retailer A large portion of the premises that the company occupies are leased Its financial statements and disclosure notes revealed the following information Balance Sheet ($ in millions) 2011 Assets Property Property under capital lease Less Accumulated amortization Liabilities Current liabilities Obligations under capital leases due within one year Long term debt Long term obligations under capital leases $5,509 (2,780) 2010 $5,669 (2,906) 336 346 3,150 3,170 Required 1 Discuss some possible reasons why Walmart leases rather than purchases most of its premises 2 The net asset property under capital lease has a 2011 balance of $2,729 million ($5,509 2,780) Liabilities for capital leases total $3,486 ($336 3,150) Why do the asset and liability amounts differ 3 Prepare a 2011 summary entry to record Walmart's lease payments, which were $600 million 4 What is the approximate average interest rate on Walmart's capital leases (Hint See Req 3)

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Walmart Stores, Inc., is the world?s largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements and disclosure

Walmart Stores, Inc., is the world?s largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements and disclosure notes revealed the following information: Balance Sheet ($ in millions) 2011 2010 Assets Property: ?Property under capital lease $5,509 $5,669 ?Less: Accumulated amortization (2,780) (2,906) Liabilities Current liabilities: ?Obligations under capital leases due within one year 336 346 Long-term debt: ?Long-term obligations under capital leases 3,150 3,170 Required: 1. Discuss some possible reasons why Walmart leases rather than purchases most of its premises. 2. The net asset ?property under capital lease? has a 2011 balance of $2,729 million ($5,509 ? 2,780). Liabilities for capital leases total $3,486 ($336 + 3,150). Why do the asset and liability amounts differ? 3. Prepare a 2011 summary entry to record Walmart?s lease payments, which were $600 million. 4. What is the approximate average interest rate on Walmart?s capital leases? (Hint: See Req. 3) image text in transcribed

Walmart Stores, Inc., is the world's largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements and disclosure notes revealed the following information: Balance Sheet ($ in millions) 2011 Assets Property: Property under capital lease Less: Accumulated amortization Liabilities Current liabilities: Obligations under capital leases due within one year Long-term debt: Long-term obligations under capital leases $5,509 (2,780) 2010 $5,669 (2,906) 336 346 3,150 3,170 Required: 1. Discuss some possible reasons why Walmart leases rather than purchases most of its premises. 2. The net asset \"property under capital lease\" has a 2011 balance of $2,729 million ($5,509 2,780). Liabilities for capital leases total $3,486 ($336 + 3,150). Why do the asset and liability amounts differ? 3. Prepare a 2011 summary entry to record Walmart's lease payments, which were $600 million. 4. What is the approximate average interest rate on Walmart's capital leases? (Hint: See Req. 3)