Refer to Amazon.com, Inc.’s consolidated financial statements in Appendix A at the end of this book.
1. Did accounts payable for Amazon.com, Inc., increase or decrease in 2008? What was the amount? What might have caused this change?
2. Examine Note 12 Income Taxes in the Notes to Consolidated Financial Statements.
Income tax provision is another title for income tax expense. What was Amazon.com, Inc.s income tax provision in 2008? How much did the company pay in federal income taxes? How much was income taxes payable as of December 31, 2008? In general, why were these amounts different? (Challenge)
3. Did Amazon.com, Inc., borrow more or pay off more long-term debt during 2008? How can you tell? (Challenge)
4. Examine Note 7 Commitments and Contingencies in the Notes to Consolidated Financial Statements. Describe some of Amazon.com, Inc.’s contingent liabilities as of December 31, 2008.
5. How would you rate Amazon.com, Inc.’s overall debt position risky, safe, or average? Compute the ratio at December 31, 2008, that answers this question.