Go to the Web site for Time Warner (www.timewarner.com). Click on Investor Relations. Find and open the

Question:

Go to the Web site for Time Warner (www.timewarner.com). Click on Investor Relations. Find and open the most recent annual report.

Answer the following questions:

1. Refer to Time Warner’s Statement of Income. What is the dollar amount of total revenues?

What categories comprise its total revenues? Which category constitutes the largest percentage of total revenues?

2. Refer to Time Warner’s Notes to Consolidated Financial Statements. Locate the footnote containing discussion of Time Warner’s revenue recognition policies. Does Time Warner use a single revenue recognition policy to account for all of its different revenue generating activities? Find the portion of the footnote that discusses the revenue recognition policy for publishing activities. When does Time Warner recognize revenue from magazines? How does it account for subscriptions paid for in advance?

3. How much is Time Warner’s “unearned revenue”? What does it represent and where is it found in the financial statements?

4. Does Time Warner prepare its income statement using the cash or accrual basis? What items on the balance sheet are clues to answering this question?

5. Do you think Time Warner is a profit-seeking organization? What clues on the financial statements help you answer this?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...