Financial Statement Case 6-1

The notes are an important part of a companys financial statements, giving valuable details that would clutter the tabular data presented in the statements. This case will help you learn to use a companys inventory notes.

Requirements

1. Which inventory costing method does Target use? How does Target value its inventories? See Note 10.
2. By using the cost of goods sold formula, you can compute net purchases, which are not reported in the Target financial statements. How much were Targets inventory purchases during the year ended January 29, 2022?
3. Determine Targets inventory turnover and days sales in inventory for the year ended January 29, 2022. (Round each ratio to one decimal place.) How do Targets inventory turnover and days sales in inventory compare with Kohls Corporations for the year ended January 29, 2022? Explain.

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