on its balance sheet in its 2013 financial statements wal mart reported about 2 5 bi 3387358

On its balance sheet in its 2013 financial statements, Wal-Mart reported about $ 2.5 billion of property under capital leases, representing only about 1% of its total assets. Use Wal-Mart’s lease disclosures and information below to address the following questions. Wal-Mart Stores, Inc. Excerpt from January 31, 2014, Financial Statements 11 Commitments The Company has long-term leases for stores and equipment. Rentals (including amounts applicable to taxes, insurance, maintenance, other operating expenses and contingent rentals) under operating leases and other short-term rental arrangements were $ 2.8 billion, $ 2.6 billion and $ 2.4 billion in fiscal 2014, 2013 and 2012, respectively. Aggregate minimum annual rentals at January 31, 2014, under non-cancelable leases are as follows: Required: a. Explain the financial statement effects of an operating lease versus a capital lease on the balance sheet and income statement. What are the financial statement effects of capitalizing operating expenses? b. What are the journal entries to reflect scheduled payments during fiscal 2015 for operating and capital leases in place at the end of fiscal 2014? Wal-Mart reported $ 309 billion of obligations under capital leases due within one year on its January 31, 2014, balance sheet. c. Using the information from part b, estimate Wal-Mart’s average interest rate on capital leases. d. If Wal-Mart had treated operating leases as capital leases, what journal entry would it mak

 

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