Estimated useful lives for financial statement purposes are as follows: Asset Buildings and improvements Fixtures and equipment Transportation equipment Selected Income Statement Information Required: ($in millions) Depreciation and amortization Income from continuing operations before income taxes Income from continuing operations. Source Walmart Stores, Inc., 2014 annual report Assume a 35% tax rate. Life (in Years) 3-40 2-30 3-15 Years Ended January 31, 2015 January 31, 2015 $ 9,100 24,799 16.814 $ 8,800 24,656 16,551 1. Estimate the average useful life of each firm's long-lived assets as of January 31, 2015. 2. Calculate a revised estimate of Walmart's depreciation expense for the year ended January 31, 2015, using the estimated average useful life of Target's assets. Use this amount to recalculate Walmart's income before taxes and income from continuing operations for the year ended January 31, 2015. 3. Calculate a revised estimate of Target's depreciation expense for the year ended January 31, 2015, using the estimated average useful life of Walmart's assets. Use this amount to recal- culate Target's earnings before income taxes and net earnings from continuing operations for the year ended January 31, 2015. 4 Why might a financial analyst want to make adjustments in requirements 2 and 3? 5. What factors will affect the reliability and accuracy of the adjustments performed in requirements 2 and 3? Coses 11-55 Walmart Stores, Inc. Property and Equipment ($ in millions) Land Buildings and improvements Fixtures and equipment Transportation equipment Property under capital lease Property and equipment Accumulated depreciation Property and equipment, net January 31, 2015 $ 26,261 97,496 January 31, 2014 $ 26,184 95,488 45,044 42,971 2,807 2,785 5,787 5,661 177,395 173,089 (63,115) (57,725) $114,280 $115,364
Estimated useful lives for financial statement purposes are as follows: Asset Buildings and improvements Fixtures and equipment Transportation equipment Selected Income Statement Information Required: ($in millions) Depreciation and amortization Income from continuing operations before income taxes Income from continuing operations. Source Walmart Stores, Inc., 2014 annual report Assume a 35% tax rate. Life (in Years) 3-40 2-30 3-15 Years Ended January 31, 2015 January 31, 2015 $ 9,100 24,799 16.814 $ 8,800 24,656 16,551 1. Estimate the average useful life of each firm's long-lived assets as of January 31, 2015. 2. Calculate a revised estimate of Walmart's depreciation expense for the year ended January 31, 2015, using the estimated average useful life of Target's assets. Use this amount to recalculate Walmart's income before taxes and income from continuing operations for the year ended January 31, 2015. 3. Calculate a revised estimate of Target's depreciation expense for the year ended January 31, 2015, using the estimated average useful life of Walmart's assets. Use this amount to recal- culate Target's earnings before income taxes and net earnings from continuing operations for the year ended January 31, 2015. 4 Why might a financial analyst want to make adjustments in requirements 2 and 3? 5. What factors will affect the reliability and accuracy of the adjustments performed in requirements 2 and 3? Coses 11-55 Walmart Stores, Inc. Property and Equipment ($ in millions) Land Buildings and improvements Fixtures and equipment Transportation equipment Property under capital lease Property and equipment Accumulated depreciation Property and equipment, net January 31, 2015 $ 26,261 97,496 January 31, 2014 $ 26,184 95,488 45,044 42,971 2,807 2,785 5,787 5,661 177,395 173,089 (63,115) (57,725) $114,280 $115,364
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education