Question: The balance sheet and disclosure of significant
The balance sheet and disclosure of significant accounting policies taken from the 2016 annual report of Wal- Mart Stores, Inc., appear below. Use this information to answer the following questions: 1. What are the asset classifications contained in Walmart’s balance sheet? 2. What amounts did Walmart report for the following items for 2016: a. Total assets b. Current assets c. Current liabilities d. Total equity e. Retained earnings f. Inventories 3. What is Walmart’s largest current asset? What is its largest current liability? 4. Compute Walmart’s current ratio for 2016. 5. Identify the following items: a. The company’s inventory valuation method b. The definition of cash equivalents 
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WAL-MART STORES, INC. Consolidated Balance Sheets ($ in millons except per share data) As of January 31, 2016 2015 Assets Current assets: $ 8,705 5,624 44,469 1,441 $ 9,135 6,778 45,141 2,224 Cash and cash equivalents Receivables, net Inventories Prepaid expenses and other Total current assets Property and equipment: Property and equipment Less accumulated depreciation Property and equipment, net Property under capital leases 60,239 63,278 176,958 177,395 (63,115) (66,787) 110,171 114,280 Property under capital lease and financing obligations 5,239 11,096 Less accumulated amortization Property under capital leases and financing obligations, net Goodwill (4,751) (2,864) 6,345 16,695 6,131 2,375 18,102 5,455 Other assets and deferred charges $199,581 Total assets $203,490 Llabilites, Redeemable Noncontrolling Interest and Equity Current llabilities: $ 2,708 Short-term borrowings Accounts payable Accrued liabilities Accrued income taxes 38,487 19,607 521 $ 1,592 38,410 19,152 1,021 4,791 Long-term debt due within one year Capital lease and financing obligations due within one year 2,745 551 287 Total current liabilities Long-term debt Long-term capital lease and financing obligations 64,619 38,214 65,253 40,889 2,606 8,805 5,816 Deferred income taxes and other 7,321 Commitments and contingencies Equlty: Common stock 317 1,805 90,021 323 Capital in excess of par value Retained earnings Accumulated other comprehensive income foss) Total Walmart shareholders' equity Nonredeemable noncontrolling interest Total equity Total llabilites, redeemable noncontrolling Interest and equity 2,462 85,777 (11,597) 80,546 (7,168) 81,394 3,065 4,543 85,937 $203,490 83,611 $199,581 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS WAL-MART STORES, INC. 1 Summary of Significant Accounting Policles (In part) Cash and Cash Equivdents The Company considers investments with a maturity of three months or less when purchased to be cash equivalents. Inventories The Company values inventories at the lower of cost or market as determined primarily by the retail method of accounting, using the last-in, first-out ("LIFO") method for substantially all of the Walmart U.S. segment's merchandise inventories. Inventories for the Walmart Intenational operations are primarily valued by the retail method of accounting, using the first-in, first-out ("FIFO") method. At January 31, 2016 and 2015, our inventories valued at LIFO approximate those inventories as if they were valued at FIFO. Revenue Recognition The Company recognizes sales revenue net of sales taxes and estimated sales returns at the time it sells merchandise to the customer. Customer purchases of shopping cards are not recognized as revenue until the card is redeemed and the customer purchases merchandise by using the shopping card. The Company also recognizes revenue from service transactions at the time the service is performed. Generally, revenue from services is dassified as a component of net sales on our consolidated statements of income.
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