Refer to the financial statements of Target Corporation in Appendix B at the end of this book.

Question:

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

Requirement

1. Target does not report separate lines for short- or long-term investments on its balance sheets. However, the notes to the statements provide information. What does Target report as the amount of short-term investments for the most recent year and where is this reported on the balance sheet?
a. $8,511 in cash and cash equivalents
b. $2,577 in other current assets
c. $7,644 in cash and cash equivalents
d. $1,810 in other current assets
2. What type of short-term investments are reported by Target as cash equivalents for the most recent year? Check all that apply.
a. Debt instruments
b. Highly liquid investments
c. Securities having an original maturity of three months or less from the time of purchase
d. Equity securities
e. Securities classified as available-for-sale
3. In 2017, Target invested $75 million in the stock of Casper Sleep Inc. for a 7.3 percent ownership stake. What method should Target have used to account for the investment and why?
a. Held-to-maturity method because Casper was not a public company.
b. Equity method because it was an investment in common stock.
c. Available-for-sale method because Target did not intend to trade the securities.
d. Fair value method because it was a passive investment in common stock.
4. How much goodwill did Target report in the most recent year?
a. $633
b. $668
c. $631
d. $686
e. Goodwill is not reported by Target.