Analyzing Financial Statements Using the Internet: Gap Go to www.gapinc.com. Locate Gap's Annual Reports under Financials and Media. Select the most recent annual report.

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Answer the following questions about Gap Inc.: 1. Locate Gap's entry for accumulated depreciation and amortization. Does this represent an expense for Gap? Why does Gap keep track of accumulated depreciation? 2. Gap Inc. does not include a line for depreciation on its Consolidated Statement of Earnings. Where do you suppose depreciation expenses are included among Gap's expenses? 3. Locate Cash and Equivalents at the end of the year on the Consolidated Balance Sheet. How much did cash and cash equivalents increase or decrease during the past year? 4. Locate Shareholders' Equity on the Consolidated Balance Sheets. Consider two amounts: Common Stock at par value and Additional Paid-in Capital. How did these amounts arise? 5. Suppose Gap overstated its merchandise inventory amount in its balance sheet at the end of this year. What is the effect on cost of goods sold, on net earnings, and on ending shareholders' equity? If no other errors are made, what will be the effect on these reported amounts next year?