Refer to Amazon.com, Inc. s Consolidated Financial Statements in Appendix A at the end of the book, and answer the following questions:

1. Refer to Note 1 and Note 3 of the Notes to Consolidated Financial Statements. What kinds of assets are included in fixed assets of Amazon.com, Inc?

2. Which depreciation method does Amazon.com, Inc., use for reporting to stockholders and creditors in the financial statements? What type of depreciation method does the company probably use for income tax purposes? Why is this method preferable for tax purposes?

3. Depreciation expense is embedded in the expense amounts listed on the income statement. It is reported on the Consolidated Statements of Cash Flows. How much was Amazon.com, Inc.’s depreciation and amortization expense during 2008? Now refer to Note 3 of the Notes to Consolidated Financial Statements. How much was Amazon.com, Inc.’s accumulated depreciation and amortization at the end of 2008? Explain why accumulated depreciation and amortization exceeds depreciation and amortization expense for the current year.

4. How much did Amazon.com, Inc., spend on fixed assets, including internal-use software and website development, during 2008? In 2007? Evaluate the trend in these capital expenditures as to whether it conveys good news or bad news for Amazon.com, Inc. Explain.

5. Refer to Notes 1 and 4 of the Notes to Consolidated Financial Statements. What are Amazon.com, Inc.’s intangible assets? How does the company account for each of these intangibles over its lifetime?