Refer to the Foot Locker, Inc., Consolidated Financial Statements in Appendix B at the end of this book. This case leads you through a comprehensive analysis of Foot Locker, Inc.’s long-term assets. Its purpose is to show you how to account for plant asset (properties) transactions in summary form.
1. On the statement of cash flows, how much did Foot Locker, Inc., pay for capital expenditures during fiscal 2007? In what section of the cash flows statement do you find this amount? How much cash did Foot Locker, Inc., pay to repay capital leases in fiscal 2007? In what section of the cash flows statement was this recorded?
2. Explain Foot Locker, Inc.’s policy for capitalization of fixed assets. You can find this in Note 1 to the Consolidated Financial Statements (Summary of Significant Accounting Policies).
3. Which depreciation method does Foot Locker, Inc., use? Over what useful life does Foot Locker, Inc., depreciate various types of fixed assets?
4. Were Foot Locker, Inc.’s plant assets proportionately newer or older at the end of fiscal 2007 (versus 2006)? Explain your answer. (Challenge)