Question

Balance Sheet(values in 000's)

	period ending 1/28/2017 1/30/2016 current assets cash and cash equivalents 2,512,000 4,046,000 short-term investments 0 0 net receivables 0 0 inventory 8,039,000 8,601,000 Other Current Assets 1,169,000 1,483,000 Total Current Assets 11,990,000 14,130,000 Long-Term Assets Long-Term Investments 0 0 Fixed Assets 24,658,000 25,217,000 Goodwill 0 0 Intangible Assets 0 0 Other Assets 783,000 915,000 Deferred Asset Charges 0 0 Total Assets 37,431,000 40,262,000 Current Liabilities Accounts Payable 10,989,000 11,654,000 Short-Term Debt / Current Portion of Long-Term Debt 1,718,000 815,000 Other Current Liabilities 1,000 153,000 Total Current Liabilities 12,708,000 12,622,000 Long-Term Debt 11,031,000 11,945,000 Other Liabilities 1,878,000 1,915,000 Deferred Liability Charges 861,000 823,000 Misc. Stocks 0 0 Minority Interest 0 0 Total Liabilities 26,478,000 27,305,000 Stock Holders Equity Common Stocks 46,000 50,000 Capital Surplus 5,661,000 5,348,000 Retained Earnings 5,884,000 8,188,000 Treasury Stock 0 0 Other Equity ($638,000) ($629,000) Total Equity 10,953,000 12,957,000 Total Liabilities & Equity 37,431,000 40,262,000

Cash flow (values in000's)

period ending	1/28/2017	1/30/2016
Net Income	2,737,000	3,363,000
Cash Flows-Operating Activities
Depreciation	2,298,000	2,213,000
Net Income Adjustments	508,000	($812,000)
Changes in Operating Activities
Accounts Receivable	0	0
Changes in Inventories	293,000	($316,000)
Other Operating Activities	36,000	227,000
Liabilities	($543,000)	579,000
Net Cash Flow-Operating	5,436,000	5,958,000
Cash Flows-Investing Activities
Capital Expenditures	($1,547,000)	($1,438,000)
Investments	28,000	24,000
Other Investing Activities	46,000	1,922,000
Net Cash Flows-Investing	$1,473,000)	508,000
Cash Flows-Financing Activities
Sale and Purchase of Stock	($3,485,000)	($3,183,000)
Net Borrowings	($664,000)	($85,000)
Other Financing Activities	0	0
Net Cash Flows-Financing	($5,497,000)	($4,630,000)
Effect of Exchange Rate	0	0
Net Cash Flow	($1,534,000)	1,836,000

IV. Adjusting Entries:

A. Explain the type of depreciation method Target Corporation uses and why they use this method.

B. Identify an example of an adjusting entry (other than depreciation), such as prepaid expenses, supplies, or unearned revenue, and whether or not Target Corporation has this account listed on the balance sheet. You could consider why this might not be listed.

VI. Communication: For this part of the assessment, you will prepare memorandums to upper management addressing certain scenarios or situations.

A. As the controller of Target Corporation, compose a memo to the CEO addressing the advantages and disadvantages of transitioning from GAAP to IFRS.

B. As the controller of Target Corporation, compose a memo to the CEO addressing the following scenario: Your biggest customer has just gone bankrupt, and you must inform the CEO how this will affect your accounts receivable. Assume that the accounts receivable balance is at least $100,000.

When writing your paper considers the following:

A company may use several different depreciation methods or just one. This information will be disclosed in the notes. If the company has not explained why they use the method, you will want to consider the pros and cons of the method and use the information you know about the method to provide why you think they chose the method.

For the adjusting entry think about gift cards (accrued liabilities) and prepaid (accrued expenses), etc. Many items are adjusted based on revenue and expense recognition principles.

Transitioning from GAAP to IFRS does have advantages and disadvantages.  

When discussing Accounts Receivable make sure you do consider whether your company uses the direct write-off method, or an allowance? How would handling this scenario be different based on the method used? What accounts would be affected based on the method used to account for bad debt?

Please do make sure you fully address each critical element with appropriate detail and that you defend your content in your paper with scholarly sources.

Support your arguments with at least three peer-reviewed sources cited in APA format.

Answer 1