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Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended February 1, 2020, are available here. This material also is available under the Investor Relations link at the company's website (www.target.com).

Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended February 1, 2020, are available here. This material also is available under the Investor Relations link at the company's website (www.target.com).

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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Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended February 1, 2020, are available here. This material also is available under the Investor Relations link at the company's website (www.target.com). Required: 1. From the income statement, determine the income tax expense for the year ended February 1, 2020. Tie that number to the second table in disclosure Note 18, "Provision for Income Taxes," and prepare a summary journal entry that records Target's tax expense from continuing operations for the year ended February 1, 2020. 2. Focusing on the third table in disclosure Note 18, "Net Deferred Tax Asset/(Liability)," calculate the change in net deferred tax assets or liability. By how much did that amount change? 3. Target's Note 18 indicates that "We recognized a net tax benefit of $36 million and $372 million in 2018 and 2017, respectively, primarily because we remeasured our net deferred tax liabilities using the new lower U.S. corporate tax rate." What was the effect of the tax rate change on 2018 net income? 4. What is Target's liability for unrecognized tax benefits as of February 1, 2020? If Target were to prevail in court and realize $50 million more in tax savings than it thought more likely than not to occur, what would be the effect on the liability for unrecognized tax benefits and on net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 From the income statement, determine the income tax expense for the year ended February 1, 2020. Tie that number to the second table in disclosure Note 18, "Provision for Income Taxes," and prepare a summary journal entry that records Target's tax expense from continuing operations for the year ended February 1, 2020. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet < 1 Record the effect on liability for unrecognized tax benefits. Note: Enter debits before credits. Date February 01, 2020 General Journal Debit Credit Record entry Clear entry View general journal Required 1 Required 2 > Show less▲
Transcribed Image Text:Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the year ended February 1, 2020, are available here. This material also is available under the Investor Relations link at the company's website (www.target.com). Required: 1. From the income statement, determine the income tax expense for the year ended February 1, 2020. Tie that number to the second table in disclosure Note 18, "Provision for Income Taxes," and prepare a summary journal entry that records Target's tax expense from continuing operations for the year ended February 1, 2020. 2. Focusing on the third table in disclosure Note 18, "Net Deferred Tax Asset/(Liability)," calculate the change in net deferred tax assets or liability. By how much did that amount change? 3. Target's Note 18 indicates that "We recognized a net tax benefit of $36 million and $372 million in 2018 and 2017, respectively, primarily because we remeasured our net deferred tax liabilities using the new lower U.S. corporate tax rate." What was the effect of the tax rate change on 2018 net income? 4. What is Target's liability for unrecognized tax benefits as of February 1, 2020? If Target were to prevail in court and realize $50 million more in tax savings than it thought more likely than not to occur, what would be the effect on the liability for unrecognized tax benefits and on net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 From the income statement, determine the income tax expense for the year ended February 1, 2020. Tie that number to the second table in disclosure Note 18, "Provision for Income Taxes," and prepare a summary journal entry that records Target's tax expense from continuing operations for the year ended February 1, 2020. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). View transaction list Journal entry worksheet < 1 Record the effect on liability for unrecognized tax benefits. Note: Enter debits before credits. Date February 01, 2020 General Journal Debit Credit Record entry Clear entry View general journal Required 1 Required 2 > Show less▲
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