The SEC Form 10-K of Google is reproduced online at www.wiley.com/college/pratt. REQUIRED: Review the Google Form 10-K,

Question:

The SEC Form 10-K of Google is reproduced online at www.wiley.com/college/pratt.

REQUIRED:

Review the Google Form 10-K, and answer the following questions.

a. In terms of the basic accounting equation, explain how Google accounts for prepaid expenses. What is the dollar value of prepaid expenses on the 2012 and 2011 balance sheets?

b. In terms of the basic accounting equation, explain how Google accounts for accrued liabilities.

c. How much cash did Google spend for capital expenditures and dividends during the year ended December 31, 2012? How did these transactions affect the basic accounting equation? How much cash was collected from share issuances through stock awards and how did these transactions affect the basic accounting equation?

d. What is the balance of accounts payable on Google’s December 31, 2012, balance sheet, and how did it get there?

e. What does Google’s management say in its management letter about its system of internal controls?

f. Why is depreciation added to net income in the operating section of the statement of cash flows, and why is the increase in accounts receivable subtracted from net income?

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