Question

Identifying and Classifying Balance Sheet and Income Statement Accounts

Following are selected accounts for Staples, Inc., for the fiscal year ended January 3, 2016
(a) Indicate whether each account appears on the balance sheet (B) or income statement (I).
Staples, Inc. ($ millions) Amount Classification
Sales $24,381 I
Accumulated depreciation 4,067 B
Depreciation expense 408 I
Retained earnings 6,694 B
Net income (loss) (211) I
Property, plant & equipment, net 6,030 B
Selling, general and admin expense 4,884 I
Accounts receivable 1,816 B
Total liabilities 6,144 B
Stockholders' equity 6,136 B
(b) Using the data, compute total assets and total expenses.
Total Assets = $Answer
Total Expenses = $Answer
(c) Compute net profit margin (net income/sales) and total liabilities-to-equity ratio (total liabilities/stockholders' equity). (Round your answers to two decimal places.)
Net Profit Margin = Answer
Total Liabilities-to-Equity Ratio = Answer

Answer 1

Staples, Inc.

a. Indication of whether each account appears on the balance sheet (B) or income statement (I):

Staples, Inc. ($ millions) Amount Classification

Sales $24,381 (I)

Accumulated depreciation 4,067 (B)

Depreciation expense 408 (I)

Retained earnings 6,694 (B)

Net income (loss) (211) (I)

Property, plant & equipment, net 6,030 (B)

Selling, general and admin expense 4,884 (I)

Accounts receivable 1,816 (B)

Total liabilities 6,144 (B)

Stockholders' equity 6,136 (B)

b) Total Assets = $3,779

Total Expenses = $5,292

c) Net Loss Margin = -0.87%

Total Liabilities-to-Equity Ratio = = 100.13%

Step-by-step explanation:

a) Data and Calculations:

Total assets:

Accumulated depreciation (4,067) (B)

Property, plant & equipment, net 6,030 (B)

Accounts receivable 1,816 (B)

Total assets = $3,779

Total Expenses:

Depreciation expense 408 (I)

Selling, general and admin expense 4,884 (I)

Total expenses = $5,292

Net profit (loss) margin = $(211)/ $24,381 * 100 = -0.865%

Total liabilities-to-equity ratio = total liabilities/stockholders' equity * 100

= $6,144/$6,136 * 100

= 100.13%