Accounting

Determine the missing amounts (in millions) for the condensed balance sheets shown below.

Costco (COST) Target (TGT) Wal-Mart (WMT)

Assets $77,540 $75,155 $ __________________

Liabilities 54,278 $_____________ $169,095

Stockholders' equity 41,335 143,731

(2) Financial Statement Items

Though the McDonald's (MCD) menu of hamburgers, cheeseburgers, the Big Mac®, Quarter Pounder®, the Filet-O-Fish®, and Chicken McNuggets® is easily recognized, McDonald's financial statements may not be as familiar. The following items were adapted from a recent annual report of McDonald's Corporation:

1. Accounts payable 11. Net income

2. Accrued interest payable 12. Net increase in cash

3. Cash 13. Notes payable

4. Cash provided by operations 14. Notes receivable

5. Common Stock 15. Occupancy and rent expense

6. Food and packaging costs used in operations 16. Payroll expense

7. Income tax expense 17. Prepaid expenses not yet used in operations

8. Interest expense 18. Property and equipment

9. Inventories 19. Retained earnings

10. Long-term debt payable 20. Sales

Identify the financial statement on which each of the preceding items would appear. If an item appears on more than one statement, select the choice that includes both statements. Use the following notations:

IS Income statement

SE Statement of stockholders’ equity

BS Balance sheet

SCF Statement of cash flows

1. Accounts payable

2. Accrued interest payable

3. Cash

4. Cash provided by operations

5. Common stock

6. Food and packaging costs used in operations

7. Income tax expense

8. Interest expense

9. Inventories

10. Long-term debt payable

11. Net income

12. Net increase in cash

13. Notes payable

14. Notes receivable

15. Occupancy and rent expense

16. Payroll expense

17. Prepaid expenses not yet used in operations

18. Property and equipment

19. Retained earnings

20. Sales

Match each of the following statements with the appropriate accounting concept. Some concepts may be used more than once, while others may not be used at all.

Accounting Concept Notation

Accounting period concept P

Adequate disclosure concept D

Business entity concept B

Cost concept C

Going concern concept G

Matching concept M

Objectivity concept O

Unit of measure concept U

Use the notations shown to indicate the appropriate accounting concept.

Statements:

1. Assume that a business will continue forever.

2. Material litigation involving the corporation is described in a note.

3. Monthly utilities costs are reported as expenses along with the monthly revenues.

4. Personal transactions of owners are kept separate from the business.

5. This concept supports relying on an independent actuary (statistician), rather than the chief operating officer of the corporation, to estimate a pension liability.

6. Changes in the use of accounting methods from one period to the next are described in the notes to the financial statements.

7. Land worth $800,000 is reported at its original purchase price of $220,000.

8. This concept justifies recording only transactions that are expressed in dollars.

9. If this concept was ignored, the confidence of users in the financial statements could not be maintained.

10. The changes in financial condition are reported at the end of the month.

The following financial data were adapted from a recent annual report of Target Corporation for the year ending January 31.

In millions

Accounts payable $17,143

Cash 1,985

Common stock 7,155

Cost of goods sold 119,650

Debt and other borrowings 43,708

Income tax expense 3,818

Interest expense 2,165

Inventories 19,795

Other assets 7,105

Other expenses 6,443

Other liabilities 16,173

Property, plant, and equipment 72,873

Sales 171,165

Selling, general, and administrative expenses 35,265

Instructions:

1. Prepare Target's income statement for the year ending January 31.

Target Corporation

Income Statement

For the Year Ended January 31 (in millions)

$

Expenses:

$

Total expenses

$

2. Prepare Target's retained earnings statement for the year ending January 31, 20Y2. If an amount box is zero, enter "0".

No common stock was issue during the year

Retained earnings Feb. 1 of prior year $12,698

Dividends 3,498

Other stockholder equity items on Feb. 1 of prior year 4,555

Increase in other stockholder equity items 0

Target Corporation

Statement of Stockholders’ Equity

For the Year Ended January 31 (in millions)

Common Stock Retained Earnings Other Items Total

Balances, Feb. 1 of prior year $

$

$

$

Balances, January 31 $

$

$

$

3. Prepare a balance sheet as of January 31, for Target.

Target Corporation

Balance Sheet

January 31 (in millions)

Assets

$

Total assets $

Liabilities

$

Total liabilities $

Stockholders' Equity

$

Total stockholders' equity

Total liabilities and stockholders' equity $