INTERMEDIATE ACCOUNTING ACCESS 540 DAY
10th Edition
ISBN: 9781264706327
Author: SPICELAND
Publisher: MCG
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Chapter 12, Problem 1CCTC
Continuing Cases
Target Case
• LO12-4, LO12-6
Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended January 30, 2016, are available Connect. This material also is available under the Investor Relations link at the company’s website (www.target.com). Target does not have investments in stock or bonds. However, CVS Health Corp., which purchased Target’s pharmacy and clinical business during 2015, does have some investments. Access CVS’s 2015 10K (issued on February 9, 2016) at investors.cvshealth.com to answer the following questions,
Required:
1. CVS indicates in Note 1 that it has some short-term investments that consist of certificates of deposit (CDs).
a. How has CVS classified those CDs for accounting purposes?
b. Per CVS’s
c. Per CVS’s statement of
d. Prepare a T-account that summarizes transactions affecting CVS’s short-term investments during 2015. Speculate as to the explanation for any “plug” figure necessary to make the T-account balance.
2. Per Note 1, CVS has equity-method investments in SureScripts, LLC and in Heartland Healthcare Services. CVS indicates that those investments are immaterial for the year ended December 31, 2015. Assuming that the Heartland investment is material,
a. How would Heartland’s earnings affect CVS’s income statement?
b. How would Heartland’s earnings affect CVS’s balance sheet?
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Chapter 12 Solutions
INTERMEDIATE ACCOUNTING ACCESS 540 DAY
Ch. 12 - All investments in debt securities are classified...Ch. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5QCh. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8QCh. 12 - Prob. 12.9QCh. 12 - Prob. 12.10Q
Ch. 12 - Under IFRS No. 9, which reporting categories are...Ch. 12 - Prob. 12.12QCh. 12 - Do U.S. GAAP and IFRS differ in the amount of...Ch. 12 - Under what circumstances is the equity method used...Ch. 12 - The equity method has been referred to as a...Ch. 12 - In the application of the equity method, how...Ch. 12 - Prob. 12.17QCh. 12 - Prob. 12.18QCh. 12 - Prob. 12.19QCh. 12 - How does IFRS differ from U.S. GAAP with respect...Ch. 12 - What is the effect of a company electing the fair...Ch. 12 - Define a financial instrument. Provide three...Ch. 12 - Some financial instruments are called derivatives....Ch. 12 - (Based on Appendix 12A) Northwest Carburetor...Ch. 12 - Prob. 12.25QCh. 12 - Prob. 12.26QCh. 12 - (Based on Appendix 12B) Reporting an investment at...Ch. 12 - Prob. 12.28QCh. 12 - Prob. 12.17BECh. 12 - Prob. 12.18BECh. 12 - Prob. 12.20BECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.15PCh. 12 - Prob. 12.2DMPCh. 12 - Prob. 12.4DMPCh. 12 - Continuing Cases Target Case LO12-4, LO12-6...
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