Business Application Cases $-$ Target

The Business Application cases for chapters $3$ through $8$ are based on the Form $10-$K for Target Corp. The cases allow you to apply the concepts from the text to a live case. The text Business Application cases reference the $2018$ Fiscal Year reports, but we will use the more current $2023$ Fiscal Year reports for the year ended February $3,2024.$ You will find the complete $10$K report in a pdf file as well as an excel workbook with the financial statements posted on the Canvas course site for convenience. But I encourage you to locate them either through the SEC Edgar database $($See Appendix A$,$ Chapter $3$ in the text$),$ or by going to the Target Investor Relations web site.

Chapter $5$ Assignment $($Adapted from ATC $5-1$ in Text$)$

Use the Target Corporation Form $10-$K to answer the following questions related to the $2023$ Fiscal Year. Note that Target's Fiscal Year ends in late January or early February, so the $2023$ Fiscal Year ends February $3,2024.$ You will need to use the financial statements as well as notes to the financial statements to answer the questions. Show your calculations and extend all decimal points at least $2$ places.

Required

a$.$ What percentage of Target's total assets did inventory represent at the end of FY $2023$ and $2022($Hint; use the Statement of Financial Position$)?$

b$.$ Comment on the change in the $ amount and the $\%$ of total assets inventory represents between the years. Is this a positive or a negative and why? Comment on the impact of COVID related supply chain issues on the inventory levels.

c$.$ What cost flow method did Target use to account for its inventory $($Hint: use the footnotes beginning on page $45(46$ on the pdf file$)$ of the $10-K)?$

d$.$ Target had arrangements with some of its vendors such that it does not purchase or pay for merchandise inventory until the merchandise is sold to outside customers. Was the cost of these goods ever included in the Inventory account? $($Hint: use the footnotes beginning on page $45(46$ of the pdf file$)$ of the $10-$K You will find this discussed in Revenues Note $3)$