I would like someone to read my paper, adjust and put in better order if need be, track changes so I can learn. I would like to turn this paper in and get an A. Most work is completed?I am asking for just another set of eyes that is great at accounting to see if I can improve this paper.

AMAZON 1 Amazon.com Inc. SEC 10-K ACCT 220 6385 Principles of Accounting I Sean E. St. Louis University of Maryland University College 20 September 2015 Professor Thomas Ruple Amazon.Com Inc. 2 Abstract Annually, Amazon Inc. completes the Form 10-K for the U.S Securities and Exchange Commission (SEC) and an annual report for its investors. The SEC is the government entity that is responsible for looking after the economy by keeping corporations and businesses honest. This report analyses extensive information within the SEC 10-K report for Amazon in the fiscal year 2013 and 2014 and emphasizes on its inventory accounting policies, business internal controls, and receivables while providing an extensive background of the company. Amazon.Com Inc. 3 Background Amazon.com is a Fortune 500 e-commerce company that operates as an online retailer in North America and globally. This company started out as an on-line bookstore and quickly evolved into much more. The company added other items, such as DVD's, music CDs, software, video-games, electronics, just about everything you can think of. Since the birth of the company in 1994, and the quick development of search engines and the world-wide-web, Jeff Bezos, "the CEO" started on the first on-line shopping opportunities. Not only does Amazon offer programs that assist customers to sell their products on company websites and their own branded websites, they also serve as a developers and enterprises through amazon web and technical services that help with storage, computers, databases, and applications. Inventory Accounting Policy & Notes to Financial Statements Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first out (FIFO) method, and are valued at the lower of cost or market value. This valuation process requires Amazon.com to make judgements based on real time information about the likely method of disposition. Third-party sellers maintain ownership of their inventory and therefore, most products are not included in inventories. The company follows multi step income statement for making the income statement. The Gross Profit and Gross Profit Percentage for this year and last year according to Appendix A: Table 1 Factual information extracted from Income statement Net Sales Cost of goods sold Gross Profit Gross Profit % Dec 31' 2014 88988 62752 26236 29.48% Dec 31' 2013 74452 54181 20271 27.23% The sales of the company have increased in 2015 along with the increase in the gross profit margin. From this it can be inferred that the company has been able to increase its sales along with the decrease in the cost of goods sold with which the company was able to improve on its gross profit margin. Internal Control Rules and regulations are set in place for companies like Amazon to follow in order to conduct business. Amazon like other companies must file their financial reports to the SEC so they may have a chance of being audited by the Public Company Accounting Oversight Board (PCAOB). The output of the financial reporting model Amazon uses is driven by revenue growth rate, expected tax rate, and gross margin assumption (Harman, 2009). Using cash flow Amazon.Com Inc. 4 and earnings to build figures on the value of Amazon is the primary reasoning that helps Amazon with future financial decisions. The basic principles of the Generally Accepted Accounting Principles (GAAP) help support the financial reporting model for businesses. GAAP ensures that Amazon is using a uniform set of standards to compile the statements and helps the company be consistent with other entities such as regulators and investors use the information to compare to other businesses in past and present performances to make their own financial decisions. GAAP principles show substantial authoritative support and is comprehended by opinions of the Accounting Principles Board (Gresham, 2013). Amazon's accountants must qualify opinions based on the opinions of the Accounting Principles Board or provide opposing opinion if applicable. According to the Journal of Applied Corporate Finance, Amazon's management is consistently communicating the company's goals of maximizing, \"long-run intrinsic value,\" regardless of the effects on GAAP metrics. What this means is that the company finds it more important to maximize cash flows not maximizing the appearance of its GAAP accounting. (Tarasoff, 2013) Amazon has been consistent with standard finance theory and the fundamental valuation analysis and classic value investing approach. In doing so, Amazon has concentrated on and has been successful in maximizing long-run \"free cash flow\" per share. Amazon uses capital aggressively and focusses ultimately on long-term value. There are several individuals who oversee the accounting profession for Amazon Inc. Jeffrey Bezos is the Chairman of the Board, President, and Chief Executive Officer. Thomas Szkutak is the Senior Vice President and Chief Financial Officer. Shelley Reynolds is the Vice President, Worldwide Controller (Amazon Com Inc CIK#: 0001018724 - 10K, 2014). These three individuals oversee all of the departments that deal with the accounting profession. They have directors and managers spread out worldwide who report back to them any and all financial matter. They must report earnings in both the United States and international locations. Once these individuals have signed off on all of the financial statements, they have a team of auditors come in and look over everything to find any and all issues before the SEC gets the final documentation. The annual report for Amazon Inc. has statements and letters to the shareowners and customers that talk about the direction the company plans on going and how they are going to get there. Jeffrey Bezos goes over the past couple of years and talks about how the company has improved in some areas and has found room for improvement in other areas (Amazon.com Inc., 2013). It also includes the Proxy Statement, which is mentioned in the 10-K report but the information is not available. The 10-K report is very number driven and shows figures from the prior year. The SEC has put rules and regulations in place so that companies are held responsible for their financial reporting and any false information that may have been included. Extensive audits occur and companies are faced with the possibilities of finding out that their records are not 100% accurate. If needed, Congress will step in and help settle any concerns between the firms and their clients. Amazon.com Inc. files their quarterly annual 10-K reports with the SEC using the assumptions and principles based on their financial reporting model. Receivables & Fix Assets Amazon.Com Inc. 5 The company included \"Accounts receivable, net and other\" in consolidated balance sheets are amounts primarily related to vendor and customer receivables. As of December 31, 2014 and 2013, vendor receivables, net, were $1.4 billion and $1.3 billion, and customer receivables, net, were $1.9 billion and $1.7 billion. The company estimate losses on receivables based on known troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. The allowance for doubtful accounts was $190 million, $153 million, and $116 million as of December 31, 2014, 2013, and 2012. Additions to the allowance were $225 million, $172 million, and $136 million, and deductions to the allowance were $188 million, $135 million, and $102 million as of December 31, 2014, 2013, and 2012. The company who owes amazon is the company that uses the company services. The company that have subscribed to the company services owes the company money and these are recorded as account receivables. The company bad debts accounts are increasing each year as seen from the financial statements. The depreciation expense on the PPE was $3.6 billion, $2.5billion, and $1.7 billion, that includes amortization of property and equipment acquired under capital leases of $1.5 billion, $826 million, and $510 million for 2014, 2013 and 2012. Depreciation is recorded on a straight line basis over the estimated lives of the assets. The accumulated depreciation is increasing due to increase in the number of assets that the company have. Another reason is because the company assets are decreasing in value each year leading to an increasing in accumulated depreciation. Amazon.Com Inc. 6 References Amazon Com Inc CIK#: 0001018724 - 10K. (2014, January 31). Retrieved from U.S. Securities and Exchange Commission: http://www.sec.gov/cgi-bin/browse-edgar? action=getcompany&CIK=0001018724&owner=exclude&count=40&hidefilings Amazon.com Inc. (2013, January 2014). Retrieved from Annual Reports: http://www.annualreports.com/Company/1755 Form 10-K. (2013). Retrieved from U.S. Securities and Exchange Commission: http://www.sec.gov/answers/form10k.htm Gresham, T. (2013). What Principles of GAAP Affect the Items Reported on Financial Statements? Chron Small Business, 15-17. Harman, B. (2009, February 26). Style Matters In Financial Modeling. Retrieved from Investopedia: http://www.investopedia.com/articles/financialcareers/07/financial_modeling.asp Tarasoff, J., & McCormack, J. (2013). How to Create Value Without Earnings: The Case of Amazon. Journal Of Applied Corporate Finance, 25(3), 39-43. doi:10.1111/jacf.1202 Amazon.Com Inc. 7 Appendix A Table A1 (Amazon.com, Inc. Income Statement) AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Year Ended December 31, 2014 Net income (loss) $ 2013 (241) $ 2012 274 $ (39) Other comprehensive income (loss): Foreign currency translation adjustments, net of tax of $(3), $(20), and $(30) (325) 63 76 Net change in unrealized gains on available-for-sale securities: Unrealized gains (losses), net of tax of $1, $3, and $(3) 2 (10) 8 Reclassification adjustment for losses (gains) included in \"Other income (expense), net,\" net of tax of $(1), $(1), and $3 (3) 1 (7) (1) (9) 1 54 77 Net unrealized gains (losses) on availablefor-sale securities Total other comprehensive income (loss) Comprehensive income (loss) (326) $ (567) $ 328 See accompanying notes to consolidated financial statements. $ 38 Amazon.Com Inc. 8 Table A2 (Amazon.com, Inc. Balance Sheet) AMAZON.COM, INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) December 31, 2014 2013 ASSETS Current assets: Cash and cash equivalents Marketable securities Inventories Accounts receivable, net and other Total current assets Property and equipment, net Goodwill Other assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued expenses and other Unearned revenue Total current liabilities Long-term debt Other long-term liabilities Commitments and contingencies (Note 8) Stockholders' equity: Preferred stock, $0.01 par value: Authorized shares 500 Issued and outstanding shares none Common stock, $0.01 par value: Authorized shares 5,000 Issued shares 488 and 483 Outstanding shares 465 and 459 $ 14,557 2,859 8,299 5,612 $ 8,658 3,789 7,411 4,767 31,327 16,967 3,319 2,892 24,625 10,949 2,655 1,930 $ 54,505 $ 40,159 $ 16,459 9,807 1,823 $ 15,133 6,688 1,159 28,089 8,265 7,410 22,980 3,191 4,242 5 5 Amazon.Com Inc. 9 Treasury stock, at cost Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity (1,837) 11,135 (511) 1,949 (1,837) 9,573 (185) 2,190 10,741 9,746 $ 54,505 $ 40,159 See accompanying notes to consolidated financial statements