Reference no: EM133033191

Question - Target adopted the new leasing standard for the year ended February 2, 2019, using the modified retrospective approach outlined in ASC Topic 842. All questions relate to the year ended February 2, 2019 (fiscal 2018) unless stated otherwise. The supplemental information for the fiscal 2018 statement of cash flows reports that $130 of leased assets were obtained in exchange for new finance lease liabilities, and $246 of leased assets were obtained in exchange for new operating lease liabilities.

Presented below is information from Target Corporation's Form 10-K, Note 18, for the year ended February 2, 2019.

Required - All questions relate to fiscal 2018 unless stated otherwise.

1. Solve for the unknowns (A through F).

2. Explain how adopting ASC Topic 842 changed Target's balance sheet at February 4, 2018 (the first day of the 2018 fiscal year).

3. Explain why the amount of Operating Lease Assets differs from the amount of total Operating lease liabilities.

4. Explain why the amount of Buildings and Improvements, net of Accumulated Depreciation differs from the total amount of Finance lease liabilities.

5. Show how the fiscal 2018 income statement would change if the operating leases were treated as finance leases.

6. Show how the fiscal 2018 statement of cash flows would change if the operating leases were treated as finance leases.

7. Show how the February 2, 2019, balance sheet would change if the operating leases were treated as finance leases.