Chapter 4, Problem 4.1FSC

To determine

1):

Annual Reports: They are financial records of the entities transactions for a given reporting period and indicate the financial health of an entity. They comprise of Income Statements, Balance Sheets and Cash flow statements

Balance Sheet Format Used by Target Corporation

To determine

2):

Current Assets and Current Liabilities

Current Assets are assets that are realizable within a period of one year or less. Examples include Cash, Bank and Inventory.

Current Liabilities are liabilities that have to be settled within a period of one year or less. Examples include Creditors & Expenses Payable.

Largest Current Asset and Largest Current Liability at Jan 30, 2016

To determine

3):

Current Ratio

It is defined as Current Assets / Current Liabilities. It is an indicator of financial strength of the business.

Current Assets are assets that are realizable within a period of one year or less. Examples include Cash, Bank and Inventory.

Current Liabilities are liabilities that have to be settled within a period of one year or less. Examples include Creditors & Expenses Payable.

Current Ratios as on January 30, 2016 and January 31, 2015

To determine

4):

Classification of Assets: This practice groups assets that are similar in nature, thus ensuring that similar assets are classified, evaluated and valued in a heterogeneous fashion. Doing so ensures consistency in the financial statements for various periods.

Category under which Target reports Furniture, Fixtures and Equipment

To determine

5):

Recording of Assets at historical cost

In this practice assets are recorded at their historical purchase price throughout the lifetime of the asset.

All depreciation is posted to revenue accounts and instead of reducing the value of the asset, a separate account called accumulated depreciation is created and yearly depreciation is carried forward.

This depreciation is denoted as a deduction from the value of the asset in the financial statements.

Cost of company’s property, plant and equipment, Book Value and Accumulated Depreciation at January 30, 2016