Selected information taken from the $2022$ annual report of Walmart Inc. follows. Assume the tax rate is $30\%.$ Note: some items on the balance sheet have been removed.

Report of Independent Registered Public Accounting Firm

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Walmart Inc. $($the Company$)$ as of January $31,2022$ and $2021,$ the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended January $31,2022,$ and the related notes $($collectively referred to as the "Consolidated Financial Statements"$).$ In our opinion, the Consolidated Financial Statements present fairly, in all material respects, the financial position of the Company at January $31,2022$ and $2021,$ and the results of its operations and its cash flows for each of the three years in the period ended January $31,2022,$ in conformity with U$.$S$.$ generally accepted accounting principles.

Ernst & Young LLP

Rogers, Arkansas

March $18,2022$

Notes: Inventories

The Company values inventories at the lower of cost or market as determined primarily using the last$-$in$,$ first$-$out $("$LIFO$")$ method. If the FIFO $($first$-$in$,$ first$-$out$)$ method had been in use, inventories would have been $$15,577$ million and $$12,577$ million higher than reported in $2022$ and $2021,$ respectively.

Hint: this means the LIFO reserve is $$15,577$ million in $2022$ and $$12,577$ in $2021.$

Notes: Property and Equipment

Property and equipment are initially recorded at cost$.$ Gains or losses on disposition are recognized as earned or incurred. Costs of major improvements are capitalized, while costs of normal repairs and maintenance are expensed as incurred. The following table summarizes the Company's property and equipment balances and includes the estimated useful lives that are generally used to depreciate the assets on a straight$-$line basis:

$2022$

$2021$

Property and equipment

$283,986$

$270,857$

Accumulated depreciation

$(142,214)$

$(132,555)$

Property and equipment, net

$$141,773$

$$138,302$

Annual depreciation expense

$23,981$

Walmart Inc.

Consolidated Statements of Income

Consolidated Statements of Income $-$ USD $($$$)$ shares in Millions, $ in Millions

$12$ Months Ended

Jan. $31,2022$

Jan. $31,2021$

Jan. $31,2020$

Revenues:

Net sales

$1,145,508$

$1,118,302$

$1,047,928$

Costs and expenses:

Cost of sales

$858,000$

$840,630$

$789,210$

Operating, selling, general and administrative expenses

$235,624$

$232,576$

$217,582$

Operating income

$51,884$

$45,096$

$41,136$

Interest:

Interest, net

$3,672$

$4,388$

$4,820$

Loss on extinguishment of debt

$4,820$

$0$

$0$

Other $($gains$)$ and losses

$6,000$

$(420)$

$(3,916)$

Income before income taxes

$37,392$

$41,128$

$40,232$

Provision for income taxes

$9,512$

$13,716$

$9,830$

Consolidated net income

$27,880$

$27,412$

$30,402$

Walmart Inc.

Consolidated Balance Sheets

Consolidated Balance Sheets $-$ USD $($$$)$ $ in Millions

Jan. $31,2022$

Jan. $31,2021$

Current assets:

Cash and cash equivalents

$ $22,140$

$ $26,612$

Accounts Receivables, net

$12,420$

$9,774$

Inventories

$84,767$

$67,424$

Prepaid expenses and other

$2,279$

$31,292$

Total current assets

$121,605$

$135,101$

Property and equipment, net

$141,773$

$138,302$

Goodwill

$43,521$

$43,475$

Other long$-$term assets

$33,228$

$35,397$

Total assets

$367,290$

$378,744$

Current liabilities:

Short$-$term borrowings

$615$

$336$

Accounts payable

$82,892$

$73,712$

Accrued liabilities

$39,090$

$56,949$

Accrued income taxes

$1,277$

$363$

Long$-$term debt due within one year

$4,205$

$4,673$

Total current liabilities

$131,069$

$138,968$

Long$-$term debt

$52,296$

$61,791$

Total liabilities

$229,454$

$247,448$

Equity:

Common stock

$414$

$423$

Retained earnings

$130,356$

$133,145$

Total equity

$137,837$

$131,297$

Total liabilities and equity

$ $367,290$

$ $378,744$

Question $36$: What accounting standards does Walmart follow?

Question $36$ options:

Question $37(1$ point$)$

Which accounting firm audited the annual reports of Walmart?

Question $37$ options:

Question $38(1$ point$)$

Does the auditor consider Walmart's Statements to be fairly presented?

Question $38$ options:

Question $39(2$ points$)$

Analyze whether the trends in total revenue and net income for the years $2021-2022$ are moving in the same direction $($i$.$e$.,$ both increasing or both decreasing$).$ If they diverge, provide one possible explanation for the difference.

Question $39$ options:

Question $40(4$ points$)$

How effectively is Walmart managing the collection of their accounts receivable in $2022?$ The industry average collection period is $4$ day