Refer to the financial statements of Target Corporation in Appendix B at the end of this book. All dollar amounts are in millions.

Data From in Appendix B

1. Did the company accrue more or pay more for wages and benefits in the most recent fiscal year and by how much?
a. Target accrued more by $519.
b. Target accrued more by $1,677.
c. Target paid more by $1,158.
d. Target paid more by $1,716.
e. Cannot determine the effect or amount by the information provided.

2. Did the company receive more or accrue more for accounts and other receivables in the most recent fiscal year and by how much?
a. Target received more by $133.
b. Target accrued more by $259.
c. Target accrued more by $133.
d. Target received more by $259.
e. Cannot determine the effect or amount by the information provided.
3. Of the $935 balance in gift card liability on February 1, 2020, what adjusting entry did Target make to recognize revenue during the most recent year for gift cards redeemed by customers?

4. What is(are) Target’s revenue recognition policy(ies) for merchandise sales?
a. Target records Target gift card sales upon redemption, which is typically within one year of issuance.
b. Target records almost all retail store revenues at the point of sale.
c. Target records digital sales upon delivery to the customer.
d. All of the above are revenue recognition policies for Target.
5. Which of the following is included in the closing entry for Target for the most recent year?
a. Debit to Cost of Sales, $66,177
b. Credit to Selling, General and Administrative expenses, $18,615
c. Debit to Accumulated Depreciation, $20,278
d. Credit to Sales Revenue, $92,400
e. Debit to Retained Earnings, $4,368
6. What is the total asset turnover ratio for the most recent fiscal year and what does this suggest about the company?
a. 1.99, suggesting that Target’s management generates $1.99 in operating revenues for every dollar of assets.
b. 0.51, suggesting that Target generates $0.51 for every dollar of sales revenue.
c. 0.09, suggesting that Target’s management is not effective at utilizing assets to generate earnings.
d. 2.47, suggesting that Target’s management is effective at balancing the ratio of current assets to total assets.

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Consolidated Statements of Financial Position (millions, except footnotes) Assets Cash and cash equivalents Inventory Other current assets Total current assets Property and equipment Land Buildings and improvements Fixtures and equipment Computer hardware and software Construction-in-progress Accumulated depreciation Property and equipment, net Operating lease assets Other noncurrent assets Total assets Liabilities and shareholders' investment Accounts payable Accrued and other current liabilities Current portion of long-term debt and other borrowings January 30, February 1, 2021 2020 $ $ $ 8,511 $ 10,653 1,592 20,756 6,141 31,557 5,914 2,765 780 (20,278) 26,879 2,227 1,386 51,248 $ 12,859 $ 6,122 1,144 2,577 8,992 1,333 12,902 6,036 30,603 6,083 2,692 533 (19,664) 26,283 2,236 1,358 42,779 9,920 4,406 161