Foot Locker, Inc. - Questions from 2007 Annual Report
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The Financial Statements and footnotes are attached (scanned from my text) in PDF files. Please help me solve these problems.
1) Prepare a T-account to show the beginning and ending balances, plus all the activity in Retained Earnings for fiscal 2007.
2) What indicates that Foot Locker, Inc. owns foreign subsidiaries? Identify the item that proves your point and the financial statement on which the item appears.
3) At February 2, 2008, did Foot Locker, Inc. have a cumulative net gain or a cumulative net loss from translating its foreign subsidiaries financial statements into dollars? How can you tell?
4) What is your evaluation of the quality of Foot Locker, Inc.s earnings? State how you formed your opinion.
5) Perform a trend analysis of Foot Lockers net sales, gross profit, operating income and net income. Use 2005 as the base year, and compute trend figures for 2006 and 2007.
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Solution Summary
Your tutorial indicates how to respond to these questions and gives you a trend in Excel (click in cells to see amounts) for 2005-2007 sales, gross profit, operating profit, and net income, using 2005 as the base year.
Solution Preview
See the attached file.
1) Prepare a T-account to show the beginning and ending balances, plus all the activity in Retained Earnings for fiscal 2007.
Here is the basic format (hard to do "T" in text screen):
.......................Retained Earnings
---------------------------------------------------------
--DEBIT----------------|-----CREDIT----------------
....................................|.......Beg RE
....................................|.......+ Net income
- Dividends
....................................|......= End RE
Plug amounts:
.......................Retained Earnings
--DEBIT----------------|-----CREDIT----------------
....................................|.......1,785 Beginning
....................................|.......51 Net Income
- 77 Dividends
....................................|......= 1,760 Ending
2) What indicates that ...
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