Amazon.com—like all other businesses—makes adjusting entries prior to year-end in order to measure assets, liabilities, revenues, and expenses properly. Pay particular attention to Accumulated depreciation.

1. Open T-accounts for the following accounts with the balances shown on the annual reports at December 31, 2006 (amounts in millions, as in the Amazon.com financial statements):

2.Assume that during 2007 Amazon.com completed the following transactions (amounts in billions). Journalize each transaction (explanations are not required).

Post to the three 1-accounts. Then the balance of each account should agree with the corresponding amount reported in Amazon’s December 31, 2007, balance sheet. Check to make sure they do agree with Amazon’s actual balances.

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Accumulated Depreciation..... Accounts Payable.. Other Assets.......... $ 367 1,816 139