To answer the following questions, refer to CVS Corporation’s annual report in the Supplement to Chapter 5. Examine the balance sheets and the summary of significant accounting policies on property and equipment in the notes to the financial statements.

1. What percentage of total assets in the most recent year was property and equipment, net? Identify the major categories of CVS’s property and equipment. Which is the most significant types of property and equipment? What are leasehold improvements? How significant are these items, and what re their effects on the earnings of the company?

2. Continue with the summary of significant accounting policies item on property and equipment in the CVS annual report. What method of depreciation does CVS use? How long does management estimate its building will last as compared with furniture and equipment? What does this say about the company’s need to remodel its stores?

3. Refer to the note on impairment of long-lived assets in the summary of significant accounting polices in CVS Corporation’s annual report. How does the company determined if it has impaired assets ?