SPECIALTY RETAILER
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CONSOLIDATED BALANCE SHEETS |
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|
February 28, 2009 |
March 1, 2008 |
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|
Assets (continued) |
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Current Assets |
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|
Cash and cash equivalents |
$498 |
$1,438 |
|
Short term investments |
11 |
64 |
|
Receivables |
1,868 |
549 |
|
Merchandise inventories |
4,753 |
4,708 |
|
Other current assets |
1,062 |
583 |
|
Total current assets |
8,192 |
7,342 |
|
Property and Equipment |
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|
Land and building |
755 |
732 |
|
Leasehold improvements |
2,013 |
1,752 |
|
Fixtures and equipment |
4,060 |
3,057 |
|
Property under capital lease |
112 |
67 |
|
Less accumulated depreciation |
6,940 |
5,608 |
|
Net property and equipment |
2,766 |
2,302 |
|
Goodwill |
4,174 |
3,306 |
|
2,203 |
1,088 |
|
|
Assets |
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|
Tradenames |
173 |
97 |
|
Customer Relationships |
322 |
5 |
|
Equity and Other Investments |
395 |
605 |
|
Other Assets |
367 |
315 |
|
Total Assets |
$15,826 |
$12,758 |
Property under capital lease is comprised of buildings and equipment used in our retail operations and corporate support functions. The related depreciation for capital lease assets is included in depreciation expense. The carrying value of property under capital lease was $68 and $54 at February 28, 2009, and March 1, 2008, respectively, net of accumulated depreciation of $44 and $13, respectively.
Estimated useful lives by major asset category are as follows:
|
Asset |
Life (in years) |
|
Buildings |
25–50 |
|
Leasehold improvements |
3–25 |
|
Fixtures and equipment |
3–20 |
|
Property under capital lease |
2–20 |
Required
a. 1. What is the balance in receivables at February 28, 2009 and March 1, 2008
2. Comment on the trend in receivables.
3. What is the balance in merchandize inventories at February 28, 2009 and March 1, 2008?
4. Comment on the trend in merchandise inventories.
5. Speculate on what the trend in receivable indicates vs. the trend in merchandise inventories.
b. 1. What does it mean to have a consolidated balance sheet?
2. Comment on the consolidation policy.
c. Comment on the use of estimates.
d. Comment on the fiscal year.
e. Cash and cash equivalents—are they presented conservatively?
f. 1. Comment on the inventory loss reserve.
2. What depreciation methods are generally used for income tax purposes?
3. Why the difference in depreciation between financial reporting and tax purposes?