Using Wal-Mart’s 2009 Form 10-K contained in Appendix A, answer the following questions:
1. As a percentage of total assets, is Wal-Mart’s investment in property, plant, and equipment increasing or decreasing over time? Which of Wal-Mart’s assets is increasing the fastest as a percentage of total assets? Hint: Include property under capital lease as PP&E in calculating percentages.
2. Reference the notes to the financial statements. Which depreciation method does Wal-Mart use? Estimate the average useful life of Wal-Mart’s depreciable assets (i.e., not including land) by dividing the ending balance in the depreciable asset accounts by the depreciation expense for the year. Does the resulting estimated useful life seem reasonable?
3. Wal-Mart notes in its statement of cash flows that $11.499 billion of property, plant, and equipment was purchased in 2008. Using that information along with the detailed information from the balance sheet, compute
(a) The original cost of the equipment disposed of during 2008 and
(b) The accumulated depreciation associated with that equipment.