Q7-15. Below is an extract from Amazon's 2017 annual report. What is the firm's GAAP effective tax rate? Why does the rate differ from the top statutory tax rate? (To help answer this question, recast the rate reconciliation schedule in terms of tax rate percentage.) What are deferred taxes? What are the major deferred tax items for Amazon? What is the amount of unrecognized tax benefits Amazon has as of the year ended December 31, 2017? Year Ended December 31, 2015 2016 2017 $ 79,268 $118,573 $ 94,665 41,322 27.738 59.293 107,006 135,987 177,866 71,651 13,410 5,254 12,540 1.747 88,265 17,619 7,233 16,085 2,432 111,934 25,249 10,069 22,620 3,674 214 171 167 Net product sales Net service sales Total net sales Operating expenses: Cost of sales Fulfillment Marketing Technology and content General and administrative Other operating expense, net Total operating expenses Operating income Interest income Interest expense Other income (expense), net Total non-operating income (expense) Income before income taxes Provision for income taxes Equity-method investment activity, net of tax 104,773 131,801 173,760 4,106 2,233 50 (459) (256) 4,186 100 (484) 90 202 (848) 346 (665) (294) (300) 1,568 (950) (22) 3,892 (1.425) (96) 3,806 (769) (4) Net income $ 596 $ 2,371 $ 3,033 Q7-15. Below is an extract from Amazon's 2017 annual report. What is the firm's GAAP effective tax rate? Why does the rate differ from the top statutory tax rate? (To help answer this question, recast the rate reconciliation schedule in terms of tax rate percentage.) What are deferred taxes? What are the major deferred tax items for Amazon? What is the amount of unrecognized tax benefits Amazon has as of the year ended December 31, 2017? Year Ended December 31, 2015 2016 2017 $ 79,268 $118,573 $ 94,665 41,322 27.738 59.293 107,006 135,987 177,866 71,651 13,410 5,254 12,540 1.747 88,265 17,619 7,233 16,085 2,432 111,934 25,249 10,069 22,620 3,674 214 171 167 Net product sales Net service sales Total net sales Operating expenses: Cost of sales Fulfillment Marketing Technology and content General and administrative Other operating expense, net Total operating expenses Operating income Interest income Interest expense Other income (expense), net Total non-operating income (expense) Income before income taxes Provision for income taxes Equity-method investment activity, net of tax 104,773 131,801 173,760 4,106 2,233 50 (459) (256) 4,186 100 (484) 90 202 (848) 346 (665) (294) (300) 1,568 (950) (22) 3,892 (1.425) (96) 3,806 (769) (4) Net income $ 596 $ 2,371 $ 3,033
