Recast the financial statements Amazon (Solution)

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Recast the financial statements Amazon (Solution)

Question # 00065762 Posted By: paul911 Updated on: 04/29/2015 11:32 AM Due on: 04/30/2015

Subject Finance Topic Finance Tutorials:

Question

Recast the financial statements Amazon below. Step 1 is to classify the lines appropriately, then step 2 is to aggregate like items to produce the standardized

Helpful Notes: (a) fulfillment costs – these are viewed as cost of sales for most retailers; (b) stock option costs – these are probably for senior management and hence should probably be classified as SG&A; and (c) in the cash flow statement gains and losses on currency translations (shown at the end of the statement are shown as operating factors that imply that cash from operations in the standardized format does not equate to that reported by the firm.

Income Statement

Classifications		2002	2001	2000
Sales	Net sales	$3,932,936	$3,122,433	$2,761,983
Cost of Sales	Cost of sales	2,940,318	2,323,875	2,106,206
	Gross profit	992,618	798,558	655,777
	Operating expenses:
fulfillment costs	Fulfillment	392,467	374,250	414,509
SG&A	Marketing	125,383	138,283	179,980
SG&A	Technology and content	215,617	241,165	269,326
SG&A	General and administrative	79,049	89,862	108,962
	Stock-based compensation	68,927	4,637	24,797
stock option costs	Amortization of goodwill and other intangibles	5,478	181,033	321,772
	Restructuring-related and other	41,573	181,585	200,311
	Total operating expenses	$928,494	$1,210,815	$1,519,657
	Income (loss) from operations	64,124	-412,257	-863,880
Interest Income	Interest income	23,687	29,103	40,821
Interest Expense	Interest expense	-142,925	-139,232	-130,921
Other expense	Other income (expense), net	5,623	-1,900	-10,058
	Other gains (losses), net	-96,273	-2,141	-142,639
	Total non-operating expenses, net	($209,888)	($114,170)	($242,797)
Other expense	Loss before equity in losses of equity-method investees	-145,764	-526,427	-1,106,677
Other expense	Equity in losses of equity-method investees, net	-4,169	-30,327	-304,596
	Loss before change in accounting principle	($149,933)	($556,754)	($1,411,273)
	Cumulative effect of change in accounting principle	801	-10,523
	Net loss	($149,132)	($567,277)	($1,411,273)

Balance Sheet

Classifications	Year Beginning January 1, ($000's)	2003	2002
	Current assets:
Cash and Marketable Securities	Cash and cash equivalents	$738,254	$540,282
Cash and Marketable Securities	Marketable securities	562,715	456,303
Inventory	Inventories	202,425	143,722
Accounts Receivable	Accounts receivable, net & other current assets	112,282	67,613
	Total current assets	$1,615,676	$1,207,920
Long-Term Tangible	Fixed assets, net	239,398	271,751
Long-Term Tangible	Goodwill, net	70,811	45,367
Other Long-Term Tangible	Other intangibles, net	3,460	34,382
Other Long-Term Tangible	Other equity investments	15,442	28,359
	Other assets	45,662	49,768
	Total assets	$1,990,449	$1,637,547
	LIABILITIES AND STOCKHOLDERS' DEFICIT
	Current liabilities:
Accounts Payable	Accounts payable	618,128	444,748
Other Current Liabilities	Accrued expenses and other current liabilities	314,935	305,064
Other Current Liabilities	Unearned revenue	47,916	87,978
	Interest payable	71,661	68,632
Long-term debt	Current portion of long-term debt and other	13,318	14,992
	Total current liabilities	$1,065,958	$921,414
Long-term debt	Long-term debt and other	2,277,305	2,156,133
	Shareholders’ deficit
Common shareholders equity	Common stock, $0.01 par value: Authorized shares 5,000,000 Issued and outstanding shares -- 387,906 and 373,218 shares, respectively	3,879	3,732
Common shareholders equity	Additional paid-in capital	$1,649,946	$1,462,769
Common shareholders equity	Deferred stock-based compensation	-6,591	-9,853
Common shareholders equity	Accumulated other comprehensive income (loss)	9,662	-36,070
Common shareholders equity	Accumulated deficit	-3,009,710	-2,860,578
	Total stockholders' deficit	($1,352,814)	($1,440,000)
	Total liabilities and stockholders' deficit	1,990,449	1,637,547

Cash Flow Statement

Classifications	Year Ended December 31, ($000's)	2002	2001	2000
	OPERATING ACTIVITIES:
Net income	Net loss	($149,132)	($567,277)	($1,411,273)
Long-term operating accruals – other	Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Long-term operating accruals – depreciation and amortization	Depreciation of fixed assets and other amortization	82,274	84,709	84,460
Long-term operating accruals – other	Stock-based compensation	68,927	4,637	24,797
Long-term operating accruals – other	Equity in losses of equity-method investees	4,169	30,327	304,596
Long-term operating accruals – depreciation and amortization	Amortization of goodwill and other intangibles	5,478	181,033	321,772
Long-term operating accruals – other	Non-cash restructuring-related and other	3,470	73,293	200,311
Long-term operating accruals – other	Gain on sale of marketable securities, net	-5,700	-1,335	-280
Long-term operating accruals – other	Other losses (gains), net	96,273	2,141	142,639
Long-term operating accruals – other	Non-cash interest expense and other	29,586	26,629	24,766
Long-term operating accruals – other	Cumulative effect of change in accounting principle	-801	10,523
	Changes in operating assets and liabilities:
Net (investment in) or liquidation of operating working capital	Inventories	-51,303	30,628	46,083
Net (investment in) or liquidation of operating working capital	Accounts receivable, net and other cur. assets	-32,948	20,732	-8,585
Net (investment in) or liquidation of operating working capital	Accounts payable	156,542	-44,438	22,357
Net (investment in) or liquidation of operating working capital	Accrued expenses and other current liabilities	4,491	50,031	93,967
Net (investment in) or liquidation of operating working capital	Unearned revenue	95,404	114,738	97,818
Net (investment in) or liquidation of operating working capital	Amortization of previously unearned revenue	-135,466	-135,808	-108,211
After-tax expense	Interest payable	3,027	-345	34,341
	Net cash provided by (used in) operating activities	$174,291	($119,782)	($130,442)
	Year Ended December 31, ($000's)	2002	2001	2000
	INVESTING ACTIVITIES:
Net (investment in) or liquidation of operating long-term assets	Sales/maturities of marketable securities and investments	553,289	370,377	545,724
Net (investment in) or liquidation of operating long-term assets	Purchases of marketable securities	-635,810	-567,152	-184,455
Net (investment in) or liquidation of operating long-term assets	Purchases of fixed assets, including internal-use software	-39,163	-50,321	-134,758
Net (investment in) or liquidation of operating long-term assets	Investments (including in equity-method investees)		-6,198	-62,533
	Net cash provided by (used in) investing activities	($121,684)	($253,294)	$163,978
	FINANCING ACTIVITIES:
Net stock (repurchase) or issuance	Proceeds from exercise of stock options and other	121,689	16,625	44,697
Net stock (repurchase) or issuance	Proceeds from issuance of common stock, net of issue costs		99,831
Net debt (repayment) or issuance	Proceeds from long-term debt and other		10,000	681,499
Net debt (repayment) or issuance	Repayment of capital lease obligations and other	-14,795	-19,575	-16,927
	Financing costs			-16,122
	Net cash provided by financing activities	$106,894	$106,881	$693,147
Net debt (repayment) or issuance	Effect of exchange-rate changes on cash and cash equivalents	38,471	-15,958	-37,557
Net debt (repayment) or issuance	Net increase (decrease) in cash and cash equivalents	$197,972	($282,153)	$689,126

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score 3 · Accepted Answer · 04/29/2015 11:32 AM

Solution: Recast the financial statements Amazon (Solution)

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Recast the financial statements Amazon (Solution)

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