Use the accrual accounting system of U.S. GAAP to record how each item would affect the Cash, Other Assets, Liabilities and Owners Equity of the business in their balance sheet. In addition to these balance sheet effects, also use the rightmost column to indicate how this decision or transaction affected the earnings (aka income) reported by the business on their income statement. Indicate increases (+), decreases (-), and include amounts for any column affected.

New requirements if a transaction affects earnings, you must also give the name of the specific line item (e.g., revenue, CGS, etc.) affected. For items that affect owners equity, distinguish between contributed capital and retained earnings.

Q1

At the end of fiscal year 2020, Plug determined that it was now probable that Amazon would earn the entirety of the third tranche of warrants under the terms of the 2017 agreement. Plug determined that the fair market value of these additional warrants totaled $399.7 million and now needed to be accounted for in their 2020 financial statements under the rules for payments to customers and share-based payments. How would their 2020 financial statements be affected by recording this $399.7 million?

\begin{tabular}{|c|c|c|c|c|c|} \hline \multicolumn{3}{|c|}{ Balance Sheet } & & Income Statement \\ \hline\( +2 \multicolumn{2}{|c|}{ \) Assets } & Liabilities & \multicolumn{2}{|c|}{ Owners' Equity } & \\ \hline Cash & Other Assets & Liabilities & Contributed Capital & Retained Earnings & Earnings \\ \hline & & & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|} \hline \multicolumn{3}{|c|}{ Balance Sheet } & & Income Statement \\ \hline\( +2 \multicolumn{2}{|c|}{ \) Assets } & Liabilities & \multicolumn{2}{|c|}{ Owners' Equity } & \\ \hline Cash & Other Assets & Liabilities & Contributed Capital & Retained Earnings & Earnings \\ \hline & & & & & \\ \hline \end{tabular}