Research Assignment Analyzing Amazon.com's income statement
Complete the requirements below using the most recent financial statements available [20xx] on Amazon.com’s corporate website. Obtain the statements on the internet by following the steps below. (Be aware that the formatting of the company’s website may have changed since these instructions were written.)
■ Go to www.amazon.com.
■ At the bottom of the screen, under “Get to Know Us,” click on “Investor Relations.”
■ Annual Reports and Proxies.
■ Click on “20xx Annual Report” (the most recent year).
Read the following sections of the annual report:
■ The income statement, which Amazon.com calls the “Consolidated Statement of Operations.”
■ In the footnotes section, “Note 1—Description of Business and Accounting Policies,” read the subsections titled “Revenues,” “Shipping Activities,” and “Cost of Sales.”
Required
a. What percentage of Amazon’s sales end up as net income?
b. What percentage of Amazon’s sales go to pay for the costs of the goods being sold?
c. What specific criteria are necessary before Amazon will recognize a sale as having been completed and record the related revenue?
d. How does Amazon account for (report on its income statement) the shipping costs it incurs to ship goods to its customers?
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