Your adherent, Liz, loves to supply at Target  and is now spirited in investing in the union. Tom, another adherent,  has told her that Target’s claim organization is foolhardy with obligations of  nearly 74% of sum proceeds. Liz sees that claim on the counterpoise prevarication is  65% of sum proceeds and is abashed by Tom’s expatiate. Write an  explanation to Liz discussing the claim organization of Target and why Tom  thinks Target is foolhardy. Be enduring to clear-up palpably what instruction  appears on financial statements, as courteous as what instruction does referable  appear undeviatingly on the financial statements. Use the instruction adown  in your discourse.
At fiscal year-end February 2, 2008,  Target Corporation had the aftercited proceeds and liabilities on its  counterpoise prevarication (in pets):
  Currupture liabilities $11,782   Long-account claim 15,126   Other liabilities 2,345   Sum proceeds 44,560    
Target reported the aftercited instruction on leases in the referablees to the financial statements:
Sum rupture expenditure was $165 pet in  2007, $158 pet in 2006, and $154 pet in 2005, including  percentage rupture expenditure of $5 pet in 2007, 2006, and 2005. Most  long-account leases lowerstand undivided or past options to rejuvenate, with rejuvenateal  stipulations that can avail the lease account to past than 50 years. Certain  leases as-well lowerstand options to escheatment the leased attribute.
Forthcoming incompleteness lease payments required lower non-cancellable lease agreements material at February 2, 2008, were:
  Forthcoming Incompleteness Lease Payments (in Pets) Operating Leases Principal Leases   2008 $ 239 $  12   2009   187   16   2010   173   16   2011   129   16   2010   123   17   After 2010 2, 843   155   Sum forthcoming incompleteness lease payments $3694 (a) $232   Less: Curiosity-behalf (b)   (105)   Present appreciate of incompleteness principal lease payments  $127 (c)    
(a) Sum contractual lease payments  understand $1,721 pet allied to options to avail lease accounts that are  reasonably certain of entity exercised, and as-well lowerstand $98 pet of  legally astringent incompleteness lease payments for stores that earn unreserved in 2008  or later.
(b) Calculated using the curiosity-behalf rate at inception of each lease.
(c) Lowerstands currupture fragment of $4 pet.

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