Question

Use the Income Statement, Statement of Comprehensive Income, and Balance Sheet for Alphabet (Google) to answer the following questions.

1. How much is the change in equity from non-owner sources for the most current year? Show the amount and the name of the line item.

2. How much are the outflows, using up of asset, or incurrence of liabilities for the most current period? Show the amount and the name of the line item.

3. How much is income from peripheral transactions for the most current period? Show the amount and the name of the line item.

4. How much are the probable future sacrifices of economic benefits for the most current period? Show your computation and label the line item.

5. List one asset on the balance sheet that is shown at net realizable value. Indicate the name of the asset and the amount for the most current period.

Alphabet Inc. CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) Year Ended December 31, 2016 2015 2017 $ 74,989 90,272 $110,855 Revenues Costs and expenses Cost of revenues 28,164 35,138 45,583 12,282 13,948 16,625 9,04710,485 12,893 6,872 2,736 55,629 66,556 84,709 19,360 23,716 26,146 1,047 19,651 24,150 27,193 4,672 14,531 $ 16,348 $ 19,478 $ 12,662 Research and development Sales and marketing General and administrative 6,136 6,985 European Commission fine Total costs and expenses Income from operations Other income (expense), net Income before income taxes Provision for income taxes Net income 291 434 3,303 Less: Adjustment Payment to Class C capital stockholders Net income available to all stockholders 522 $ 15,826 $ 19,478 $ 12,662 Basic net income per share of Class A and B common stock $ 23.11 $28.32 $ 18.27 $ Basic net income per share of Class C capital stock 24.63 $ 28.32 $ 18.27 Diluted net income per share of Class A and B common stock $ 22.84 $ 27.85 $18.00 18.00 Diluted net income per share of Class C capital stock $ 24.34 $ 27.85 $ See accompanying notes

Answer 1

(1) Change in Equity from non- owner sources i.e. from current & long term Debt. It will consists of current and long term liabilities i.e. $16332 millions ($44793- $28461) for the current as per December 31, 2017 in the balance sheet Liabilities section.

(2) Expenses are termed as the outflows, using up of assets or incurrence of liabilities. Therefore expenses for the current period can be calculated from Alphabet Inc, Consolidated Statement of Income in the Total costs and expenses section for the the year ended December 31,2017 is equal to $84709 millions.

(3) For calculating Income from peripheral transactions we need to look in the Alphabet Inc, Consolidated Statement of Income for the year ended December 31,2017 in the other income section (excluding income from operations) i.e. $1047 millions.

(4) Liabilities are termed as probable future sacrifices of economic benefits. Hence we will check the total Liabilities of the company in the Balance Sheet for the current period i.e as per December 31, 2017. Total Liabilities is equal to $44793 millions.

(5) Property and equipment is an asset in the Balance Sheet shown at the Net realized value. Property and Equipment is shown at Assets side in the Balance Sheet. As of December 31, 2017 net realizable value of Property and equipment is equal to $42383 millions.