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Real World Financials Walmart Inc. is the world's largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements revealed the following information: (Amounts in millions) Assets Operating lease right-of-use assets, net July 31, 2020 July 31, 2019 $16,869 $17,239 4,843 3,949 Finance lease right-of-use assets, net Liabilities Current liabilities: Operating lease obligations due within one year 1,734 1,795 Finance lease obligations due within one year 549 439 Long-term debt: Long-term operating lease obligations Long-term finance lease obligations 15,669 16,079 4,673 3,915 Required: 1. The net asset "Finance lease right-of-use assets, net" has a July 31, 2020 balance of $4,843 million. Liabilities for these leases total $5,222 ($549 $4,673). Why do the asset and liability amounts differ? 2. Prepare a journal entry that summarizes Walmart's finance lease payments for the twelve months ended July 31, 2020. Walmart's income statement reports finance lease interest of $331 million.

Real World Financials Walmart Inc. is the world's largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements revealed the following information: (Amounts in millions) Assets Operating lease right-of-use assets, net July 31, 2020 July 31, 2019 $16,869 $17,239 4,843 3,949 Finance lease right-of-use assets, net Liabilities Current liabilities: Operating lease obligations due within one year 1,734 1,795 Finance lease obligations due within one year 549 439 Long-term debt: Long-term operating lease obligations Long-term finance lease obligations 15,669 16,079 4,673 3,915 Required: 1. The net asset "Finance lease right-of-use assets, net" has a July 31, 2020 balance of $4,843 million. Liabilities for these leases total $5,222 ($549 $4,673). Why do the asset and liability amounts differ? 2. Prepare a journal entry that summarizes Walmart's finance lease payments for the twelve months ended July 31, 2020. Walmart's income statement reports finance lease interest of $331 million.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Real World Financials Walmart Inc. is the world's largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements revealed the following information: (Amounts in millions) Assets Operating lease right-of-use assets, net July 31, 2020 July 31, 2019 $16,869 $17,239 4,843 3,949 Finance lease right-of-use assets, net Liabilities Current liabilities: Operating lease obligations due within one year 1,734 1,795 Finance lease obligations due within one year 549 439 Long-term debt: Long-term operating lease obligations Long-term finance lease obligations 15,669 16,079 4,673 3,915 Required: 1. The net asset "Finance lease right-of-use assets, net" has a July 31, 2020 balance of $4,843 million. Liabilities for these leases total $5,222 ($549 $4,673). Why do the asset and liability amounts differ? 2. Prepare a journal entry that summarizes Walmart's finance lease payments for the twelve months ended July 31, 2020. Walmart's income statement reports finance lease interest of $331 million.
Transcribed Image Text:Real World Financials Walmart Inc. is the world's largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements revealed the following information: (Amounts in millions) Assets Operating lease right-of-use assets, net July 31, 2020 July 31, 2019 $16,869 $17,239 4,843 3,949 Finance lease right-of-use assets, net Liabilities Current liabilities: Operating lease obligations due within one year 1,734 1,795 Finance lease obligations due within one year 549 439 Long-term debt: Long-term operating lease obligations Long-term finance lease obligations 15,669 16,079 4,673 3,915 Required: 1. The net asset "Finance lease right-of-use assets, net" has a July 31, 2020 balance of $4,843 million. Liabilities for these leases total $5,222 ($549 $4,673). Why do the asset and liability amounts differ? 2. Prepare a journal entry that summarizes Walmart's finance lease payments for the twelve months ended July 31, 2020. Walmart's income statement reports finance lease interest of $331 million.
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