ACCT Project

Topics: Balance sheet, Generally Accepted Accounting Principles, Revenue Pages: 5 (1126 words) Published: November 20, 2014
Patrick Tran
Professor Wallace
ACCT 2301
8 May 2014
The Home Depot, INC. and Subsidiaries
I. Introduction
1. Frank S. Blake since 2007
2. 2455 Paces Ferry Road, N.W., Atlanta, Georgia 30339.
3. February 2, 2014
4. The home depot’s principal activity is retail, selling a wide assortment of building materials, home improvement, and lawn and garden products. The Home Depot also offers a number of services to aid the customers in home improvement. 5. The main geographic area of activity is within the United States, but there hundreds of Home Depot location in the Puerto Rico, U.S Virgin Islands, 10 Canadian provinces, and Mexico. 6. KPMG LLP

7. Home Depot is doing really well financially and is expected to continue growing. 8. The financial statements are not the responsibility of the independent accountants. 9. The Home Depot Inc.’s management is responsible for financial reporting and for its assessment of the effectiveness of internal control over financial reporting. 10. $77.73

11. $0.47 per share
12. New York Stock Exchange
13. HD
II. Industry Situation and Company Plans
The Home Depot sells building material for home improvement, lawn and garden care, and services to supplement the other sides of their business. Their priorities lie in customer service, product authority, and productivity/efficiency. They are leaving the Chinese market, but with plans to open more stores in the US and Mexico.

Their future plans are focused around a number of in store projects that will enhance the customer’s experience. They plan to cut out unnecessary store reports, store based emails and meetings that were halting store sales with what they call “project simple”. They are also making headway in smartphone based sales to streamline the checkout process freeing up more time for associates to help customers navigate the store.

When closing the Chinese stores they stockholders will lose some money in dividends but it’s important for the public to remember that the company first paid out cash dividends in June of 1984, and has consistently paid every year since. III. Financial Statements

A. Income Statement
1. Multi-step format

From 2013 to 2014, gross profit, income from operations, and net income have increased. The next year will most likely increase, as well B. Balance Sheet
(amounts in millions)
Feb. 2,2014
Feb. 3,2014
Stockholders’ Equity
Total Liabilities
Stockholders’ Equity = Assets

C. Statement of Cash Flows
1. Cash flows from operations are more than net income for both fiscal years. 2. Investing activity is capital expenditures.
3. Company’s most important source of financing is repurchases of Common Stock. 4. Increased over past two years.
IV. Accounting Policies
A. Revenues- Home Depot recognizes revenue, net of estimated returns and sales tax, at the time the customer takes possession of merchandise or receives services. Cash Equivalents- Home Depot cash equivalents are carried at fair market value and consist primarily of money market funds. Merchandise Inventories- it is stated at the lower of cost (FIFO) or market as determined by the retail method Property and Equipment Depreciation- Home Depot building, furniture, fixtures and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. B. Property and Leases, debt, accelerated share repurchase agreements, income taxes, employee stock plans, employee benefit plans, china store closings, debt guarantee, fair value measurements C. The footnotes provide the information necessary to determine whether or not the company is using the “easy” way to show that it’s doing well versus using the “difficult” way which might make its financial status seem negative. Home Depot is providing an honest report on its finances from the year before, so by looking at...
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