Chapter 8, Problem 8.4P

Best Buy Co., Inc., headquartered in Richfield, Minnesota, is one of the leading consumer electronics retailers, operating more than 1,200 stores in the United States, Canada, China, and Mexico. The following was reported in a recent annual report:

CONSOLIDATED BALANCE SHEETS
($ in millions)	Current Year	Prior Year
ASSETS
Property and Equipment
Land and buildings	$ 766	$ 757
Leasehold improvements	2,318	2,154
Fixtures and equipment	4,701	4,447
Property under capital lease	120	95
	7,905	7,453
Less accumulated depreciation	4,082	3,383
Net property and equipment	3,823	4,070

Required:

1. 1. Assuming that Best Buy did not sell any properly, plant, and equipment in the current year, what was the amount of depreciation expense recorded during the current year?
2. 2. Assume that Best Buy failed to record depreciation during the current year. Indicate the effect of the error (i.e., overstated or understated) on the following ratios:
3. a. Earnings per share.
4. b. Fixed asset turnover.
5. c. Current ratio.
6. d. Return on assets.