The notes are an important part of a company's financial statements, giving valuable details that would clutter the tabular data presented in the statements. This case will help you learn to use a company's inventory notes. Visit www.pearsonhighered.com/Horngren to view a link to Target Corporation's fiscal year ended January 31, 2016, Annual Report. Access the financial statements and related notes, and answer the following questions:
Requirements
1. Which inventory costing method does Target use? How does Target value its inventories? See Note 12.
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 Target's inventory purchases during the year ended January 30, 2016?
3. Determine Target's inventory turnover and days' sales in inventory for the year ended January 30, 2016. (Round each ratio to one decimal place.) How do Target's inventory turnover and days' sales in inventory compare with Kohl's Corporation's for the year ended January 30, 2016? Explain.