intermediate accounting 416416

Wal Mart Stores, Inc., is the world’s largest retailer. A large portion of the premises that the company occupies are leased. Its financial statements and disclosure notes revealed the following information: Balance Sheet ($ in millions) 2011 2010 Assets Property: Property under capital lease $5,509 $5,669 Less: Accumulated amortization (2,780) (2,906) Liabilities Current Liabilities: Obligations under capital leases due within one year 336 346 Long term debt: Long term obligations under capital leases 3,150 3,170 Required: 1). Discuss some possible reasons why Walmart leases rather than purchases most of its premises. 2). The net asset “property under capital lease” has a 2011 balance of $2,729 million ($5,509 2,780). Liabilities for capital leases total $3,486 ($336+3,150). Why do the asset and liability amounts differ?