This case is based on the consolidated financial statements of Foot Locker, Inc., given in Appendix B at the end of this book. Refer specifically to Note 1, Summary of Significant Accounting Policies.
1. What indicates that Foot Locker, Inc., owns foreign subsidiaries? Identify the item that proves your point and the financial statement on which the item appears.
2. Which currency, the U.S. dollar, or the currency of foreign countries in which Foot Locker did business, was stronger in each fiscal year 2007, 2006, and 2005? Give the evidence to support each answer.
3. At February 2, 2008, did Foot Locker, Inc., have a cumulative net gain or a cumulative net loss from translating its foreign subsidiaries financial statements into dollars? How can you tell?