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Financial information for Buckle is presented in Appendix B. Required: 1. What does the Report of Independent Registered Public Accounting Firm indicate about Buckle's internal controls? 2. In the summary of significant accounting policies, how does Buckle define cash equivalents? 3-a. What is the amount of cash reported in the two most recent years? 3-b. How much has cash increased/decreased from the previous year? 4. Determine the amounts Buckle reports for net cash flows from operating activities, investing activities, and financing activities in its statement of cash flows for the most recent year. What are total cash flows for the year? 6. What is Buckle's ratio of cash to noncash assets? Complete this question by entering your answers in the tabs below. B-4 APPENDIX B The Buckle, Inc., 2020 Annual Report BUCKLE, INC. CONSOLIDATED BALANCE SHEETS (Amounts in Thousands Except Share and Per Share Amounts) CURRENT ASSETS: Cash and cash equivalents Short-term investments (Notes B and C) Receivables Inventory Prepaid expenses and other assets Total current assets PROPERTY AND EQUIPMENT (Note E) Less accumulated depreciation and amortization OPERATING LEASE RIGHT-OF-USE ASSETS (Note D) LONG-TERM INVESTMENTS (Notes B and C) OTHER ASSETS (Notes G and H) Total assets LLABILITIES AND STOCKHOLDERS' EQUTTY CURRENT LIABILITIES: COMMITMENTS (Notes F and I) STOCKHOLDERS" EQUTTY (Note K): Common stock, authorized 100,000,000 shares of $.01 par value; 49,205,681 and 49,017,395 shares issued and outstanding at February 1, 2020 and February 2, 2019, respectively Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity See notes to consolidated financial statements. THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF INCOME (Amoents in Thousands Excent Per Share Amounts) G. INCOME TAXES On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act included many changes to the U.S. tax code including reducing the U.S. federal corporate tax rate from 35.0% to 21.0% effective January 1 , 2018. This change roduced the Company's effective tax rate for the fiscal year ended February 3, 2018, based on the 21.0\% rate being in effect for one month of the fiseal year, and then further redueed the Company's effective tax rate for the full fiscal years cnded February 2, 2019 and February I, 2020. The provision for income taxes consists of: 1. COMMITMENTS AND CONTINGENCIES Litigation - From time to time, the Company is involved in litigation relating to claims arising out of its operations in the normal course of business. As of the date of these consolidated financial statements, the Company was not engaged in any legal proceedings that are expocted, individually or in the aggregate, to have a material effect on the Company's consolidated results of operations and financial position. L. EARNINGS PER SHARE The following table provides a reconciliation between basic and diluted earnings per share: (a) Shares in thousands. M. REVENUES The Company is a retailer of medium to better priced easual apparel, footwear, and accessories for fashion conscious young men and women. The Company operates its business as one reportable segment. The Company sells its merchandise through its retail stores and e-Commerce platform. The Company operated 448 stores located in 42 states throughout the United States as of February 1, 2020. During fiscal years 2019,2018 , and 2017 , online revenues accounted for 12.3%,11.7%, and 10.7%, respectively, of the Company's net sales. No sales to an individual customer or country, other than the United States, accounted for more than 10.0% of net sales. The following is information regarding the Company's major product lines, stated as a percentage of the Company's net sales: \begin{tabular}{ccc} \hline \multicolumn{3}{c}{ Fiscal Years Ended } \\ \hline February 1, & February 2, & February 3, \\ 2020 & 2019 & 2018 \\ \hline \end{tabular} On December 22, 2017, the U.S. govemment enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act included many changes to the U.S. tax code including reducing the U.S. foderal comporate tax rate from 35.0\% to 21.0\% effective January 1, 2018. This change roduced the Company's effective tax rate for the fiscal year ended February 3, 2018, based on the 21.0% rate being in effect for one month of the fiscal year, and then further redueed the Company's effective tax rate for the full fiscal years ended February 2, 2019 and February I, 2020. The provision for income taxes consists of 1. COMMITMENTS AND CONTINGENCIES Litigation - From time to time, the Company is involved in litigation relating to claims arising out of its operations in the normal course of business. As of the date of these consolidated financial statements, the Company was not engaged in any legal proceedings that are expected, individually or in the aggregate, to have a material effect on the Company's consolidated results of operations and financial position. L. EARNINGS PER SHARE The following table provides a reconciliation between basic and diluted earnings per share: (a) Shares in thousands. M. REVENUES The Company is a retailer of medium to berter priced casual apparel, footwear, and accesories for fashion conscious young men and women. The Company operates its business as one reportable segment. The Company sells its merchandise through its retail stores and e-Commerce platform. The Company operated 448 stores located in 42 states throughout the United States as of February 1, 2020. During fiscal years 2019, 2018, and 2017, online revenues accounted for 12.3%,11.7%, and 10.7\%, respectively, of the Company's net sales. No sales to an individual customer or country, other than the United States, accounted for more than 10.0% of net sales. The following is information regarding the Company's major product lines, stated as a percentage of the Company's net sales: Merchandise Group APPENDIX B The Buckle, Inc., 2020 Annual Report B-13 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of The Buckle, Inc. Opinion en Internal Control over Financial Reporting We have audited the internal control over financial reporting of The Buckle, lne. and subsidiary (the "Company") as of February 1 , 2020, based on criteria established in Intermal Confrol - Integrated Framework (2013) issued by the Committee of Sponsoring Organivations of the Treadway Commission (COSO). Ia our opinion, the Company maintained, in all material respects, effective intertal control over financial reporting as of February 1 , 2020, based on criteria established in Lnterwal Condrol - lategrated Framework (2013) issued by COSO. We have also audited, in aceordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended February 1, 2020, of the Company and our report dated April 1, 2020, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company's adoption of Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leares (Topic 842). Basis for Opiaion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effoctiveness of intemal control over financial reporting, included in the accompanying Manogement's Report ow lhtemal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US. federal securities laws and the applicable rules and regulations of the Securities and Exehange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PC.AOB. Tbose standurds require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material reypects. Our audit incloded obtaining an undertanding of intemal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effoctiveness of internal control based oa the assessed risk, and performing such other procedures as we considered necesary in the circumatances. We believe that our audit peovides a reasoeable basis for our opinion. Definitien and Limitations of Interaal Contrel over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acecpled accounting principles. A company's intemal control ever financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reawonable detail, accurately and fairly feflect the transactions and dispositions of the assets of the company; (2) provide reasonable asvurance that transactions are rocoeded as acoesary to permit pecparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the coerpany; and (3) provide reawonable assurance rcgarding prevention or timely detection of uauthorized acquisition, wse, of disposition of the compony's assets that could have a material effect on the finaneial statcments. Because of its inherent limitations, intemal control over financial reporting may not prevent or detect mistatements. Also, projections of any evaluation of effectivencss to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of complianee with the policies or procedures may deteriorate. A Dekitte \& Touche L.I.P Omaha, Nebraska ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCLAL DISCLOSURE None. ITEM 9A - CONTROLS AND PROCEDURES The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that material information, which is required to be timely disclosed, is accumulated and communicated to management in a timely manner. An evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securitics Exchange Act of 1934 (the "Exchange Act -7) was performed as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures as of the end of the period covered by this report were effective to provide reasonable assurance that information required to be disclosed by the Company in the Company's reports that it files or submits under the Exchange Act is accumulated and communicated to management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required diselosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized, and reported within the time periods specified by the SEC's rules and forms. Change in Internal Control Over Financial Reporting - There were no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's intermal control over financial reporting. Management's Report on Internal Control Over Financial Reporting - Management of the Company is responsible for establishing and maintaining adcquate internal control over financial reporting as defined in Rules 13a-15(f) and 15d15(f) under the Securities Exchange Act of 1934 . The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for extemal purposes in accordance with accounting principles generally aceepted in the United State of America ("GA.AP"). All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, intemal control over financial reporting may not prevent or detect misstatements. Management has assessed the effectiveness of the Company"s internal control over financial reporting as of February 1 , 2020 , based on the crileria set forth by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission in their Jnternal Control-lnicegruled Frameworl (2013). In making its assessment of internal control ower financial reporting, management has concluded that the Company's internal control over financial rcporting was effcetive as of February 1 , 2020. The Company's independent registered public accounting firm. Deloitte \& Touche L.I.P, has audited the effectiveness of the Company's intemal control over financial reporting. Their report appears herein. THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands) THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQQUTY B-4 APPENDIX B The Buckle, Inc., 2020 Annual Report 4 / 14 THE BUCKLE, INC. CONSOLIDATED BALANCE SHEETS (Amounts in Thousaads Except Share and Per Share Amounts) See notes to consolidated financial statements. THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUTTY APPENDIX B The Buckle, Inc., 2020 Annual Report B-5 See notes to consolidated financial statements. APPENDIX B The Buckle, Inc., 2020 Annual Report B-6 6/14 THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in Thersasds) See notes to consolidated financial statements. Financial information for Buckle is presented in Appendix B. Required: 1. What does the Report of Independent Registered Public Accounting Firm indicate about Buckle's internal controls? 2. In the summary of significant accounting policies, how does Buckle define cash equivalents? 3-a. What is the amount of cash reported in the two most recent years? 3-b. How much has cash increased/decreased from the previous year? 4. Determine the amounts Buckle reports for net cash flows from operating activities, investing activities, and financing activities in its statement of cash flows for the most recent year. What are total cash flows for the year? 6. What is Buckle's ratio of cash to noncash assets? Complete this question by entering your answers in the tabs below. B-4 APPENDIX B The Buckle, Inc., 2020 Annual Report BUCKLE, INC. CONSOLIDATED BALANCE SHEETS (Amounts in Thousands Except Share and Per Share Amounts) CURRENT ASSETS: Cash and cash equivalents Short-term investments (Notes B and C) Receivables Inventory Prepaid expenses and other assets Total current assets PROPERTY AND EQUIPMENT (Note E) Less accumulated depreciation and amortization OPERATING LEASE RIGHT-OF-USE ASSETS (Note D) LONG-TERM INVESTMENTS (Notes B and C) OTHER ASSETS (Notes G and H) Total assets LLABILITIES AND STOCKHOLDERS' EQUTTY CURRENT LIABILITIES: COMMITMENTS (Notes F and I) STOCKHOLDERS" EQUTTY (Note K): Common stock, authorized 100,000,000 shares of $.01 par value; 49,205,681 and 49,017,395 shares issued and outstanding at February 1, 2020 and February 2, 2019, respectively Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity See notes to consolidated financial statements. THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF INCOME (Amoents in Thousands Excent Per Share Amounts) G. INCOME TAXES On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act included many changes to the U.S. tax code including reducing the U.S. federal corporate tax rate from 35.0% to 21.0% effective January 1 , 2018. This change roduced the Company's effective tax rate for the fiscal year ended February 3, 2018, based on the 21.0\% rate being in effect for one month of the fiseal year, and then further redueed the Company's effective tax rate for the full fiscal years cnded February 2, 2019 and February I, 2020. The provision for income taxes consists of: 1. COMMITMENTS AND CONTINGENCIES Litigation - From time to time, the Company is involved in litigation relating to claims arising out of its operations in the normal course of business. As of the date of these consolidated financial statements, the Company was not engaged in any legal proceedings that are expocted, individually or in the aggregate, to have a material effect on the Company's consolidated results of operations and financial position. L. EARNINGS PER SHARE The following table provides a reconciliation between basic and diluted earnings per share: (a) Shares in thousands. M. REVENUES The Company is a retailer of medium to better priced easual apparel, footwear, and accessories for fashion conscious young men and women. The Company operates its business as one reportable segment. The Company sells its merchandise through its retail stores and e-Commerce platform. The Company operated 448 stores located in 42 states throughout the United States as of February 1, 2020. During fiscal years 2019,2018 , and 2017 , online revenues accounted for 12.3%,11.7%, and 10.7%, respectively, of the Company's net sales. No sales to an individual customer or country, other than the United States, accounted for more than 10.0% of net sales. The following is information regarding the Company's major product lines, stated as a percentage of the Company's net sales: \begin{tabular}{ccc} \hline \multicolumn{3}{c}{ Fiscal Years Ended } \\ \hline February 1, & February 2, & February 3, \\ 2020 & 2019 & 2018 \\ \hline \end{tabular} On December 22, 2017, the U.S. govemment enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act included many changes to the U.S. tax code including reducing the U.S. foderal comporate tax rate from 35.0\% to 21.0\% effective January 1, 2018. This change roduced the Company's effective tax rate for the fiscal year ended February 3, 2018, based on the 21.0% rate being in effect for one month of the fiscal year, and then further redueed the Company's effective tax rate for the full fiscal years ended February 2, 2019 and February I, 2020. The provision for income taxes consists of 1. COMMITMENTS AND CONTINGENCIES Litigation - From time to time, the Company is involved in litigation relating to claims arising out of its operations in the normal course of business. As of the date of these consolidated financial statements, the Company was not engaged in any legal proceedings that are expected, individually or in the aggregate, to have a material effect on the Company's consolidated results of operations and financial position. L. EARNINGS PER SHARE The following table provides a reconciliation between basic and diluted earnings per share: (a) Shares in thousands. M. REVENUES The Company is a retailer of medium to berter priced casual apparel, footwear, and accesories for fashion conscious young men and women. The Company operates its business as one reportable segment. The Company sells its merchandise through its retail stores and e-Commerce platform. The Company operated 448 stores located in 42 states throughout the United States as of February 1, 2020. During fiscal years 2019, 2018, and 2017, online revenues accounted for 12.3%,11.7%, and 10.7\%, respectively, of the Company's net sales. No sales to an individual customer or country, other than the United States, accounted for more than 10.0% of net sales. The following is information regarding the Company's major product lines, stated as a percentage of the Company's net sales: Merchandise Group APPENDIX B The Buckle, Inc., 2020 Annual Report B-13 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of The Buckle, Inc. Opinion en Internal Control over Financial Reporting We have audited the internal control over financial reporting of The Buckle, lne. and subsidiary (the "Company") as of February 1 , 2020, based on criteria established in Intermal Confrol - Integrated Framework (2013) issued by the Committee of Sponsoring Organivations of the Treadway Commission (COSO). Ia our opinion, the Company maintained, in all material respects, effective intertal control over financial reporting as of February 1 , 2020, based on criteria established in Lnterwal Condrol - lategrated Framework (2013) issued by COSO. We have also audited, in aceordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended February 1, 2020, of the Company and our report dated April 1, 2020, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company's adoption of Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leares (Topic 842). Basis for Opiaion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effoctiveness of intemal control over financial reporting, included in the accompanying Manogement's Report ow lhtemal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US. federal securities laws and the applicable rules and regulations of the Securities and Exehange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PC.AOB. Tbose standurds require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material reypects. Our audit incloded obtaining an undertanding of intemal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effoctiveness of internal control based oa the assessed risk, and performing such other procedures as we considered necesary in the circumatances. We believe that our audit peovides a reasoeable basis for our opinion. Definitien and Limitations of Interaal Contrel over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acecpled accounting principles. A company's intemal control ever financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reawonable detail, accurately and fairly feflect the transactions and dispositions of the assets of the company; (2) provide reasonable asvurance that transactions are rocoeded as acoesary to permit pecparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the coerpany; and (3) provide reawonable assurance rcgarding prevention or timely detection of uauthorized acquisition, wse, of disposition of the compony's assets that could have a material effect on the finaneial statcments. Because of its inherent limitations, intemal control over financial reporting may not prevent or detect mistatements. Also, projections of any evaluation of effectivencss to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of complianee with the policies or procedures may deteriorate. A Dekitte \& Touche L.I.P Omaha, Nebraska ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCLAL DISCLOSURE None. ITEM 9A - CONTROLS AND PROCEDURES The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that material information, which is required to be timely disclosed, is accumulated and communicated to management in a timely manner. An evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securitics Exchange Act of 1934 (the "Exchange Act -7) was performed as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures as of the end of the period covered by this report were effective to provide reasonable assurance that information required to be disclosed by the Company in the Company's reports that it files or submits under the Exchange Act is accumulated and communicated to management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required diselosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized, and reported within the time periods specified by the SEC's rules and forms. Change in Internal Control Over Financial Reporting - There were no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's intermal control over financial reporting. Management's Report on Internal Control Over Financial Reporting - Management of the Company is responsible for establishing and maintaining adcquate internal control over financial reporting as defined in Rules 13a-15(f) and 15d15(f) under the Securities Exchange Act of 1934 . The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for extemal purposes in accordance with accounting principles generally aceepted in the United State of America ("GA.AP"). All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, intemal control over financial reporting may not prevent or detect misstatements. Management has assessed the effectiveness of the Company"s internal control over financial reporting as of February 1 , 2020 , based on the crileria set forth by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission in their Jnternal Control-lnicegruled Frameworl (2013). In making its assessment of internal control ower financial reporting, management has concluded that the Company's internal control over financial rcporting was effcetive as of February 1 , 2020. The Company's independent registered public accounting firm. Deloitte \& Touche L.I.P, has audited the effectiveness of the Company's intemal control over financial reporting. Their report appears herein. THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands) THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQQUTY B-4 APPENDIX B The Buckle, Inc., 2020 Annual Report 4 / 14 THE BUCKLE, INC. CONSOLIDATED BALANCE SHEETS (Amounts in Thousaads Except Share and Per Share Amounts) See notes to consolidated financial statements. THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUTTY APPENDIX B The Buckle, Inc., 2020 Annual Report B-5 See notes to consolidated financial statements. APPENDIX B The Buckle, Inc., 2020 Annual Report B-6 6/14 THE BUCKLE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in Thersasds) See notes to consolidated financial statements

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