Obtain Microsoft's 2007 10-K through the ''Investor Relations'' portion of their website (do a search for Microsoft investor relations) or go to www.sec.gov and click ''Search for company filings'' under ''Filings & Forms (EDGAR).''

Required:

1. How much cash and equivalents and short-term investments did Microsoft hold as a percentage of total assets in 2006 and 2007?

2. What is Microsoft's definition of a cash equivalent (Note 1)? Does this appear consistent with other companies' definitions?

3. Look at Note 3 and specify how much of Microsoft's cash and equivalent balance is actually cash. What is their largest (in dollar terms) cash equivalent?

4. Look at Note 3 and list Microsoft's three largest short-term investment categories for 2007.

5. Look at Microsoft's corporate notes and bonds at June 30, 2007, from Note 3.

What is the amount of unrealized gains and unrealized losses for these holdings? How much is considered cash equivalents? How much is considered short-term investments? Why are some classified as cash equivalents and some as short-term investments?

6. Locate the certifications required by the CEO and CFO under Section 302 of the Sarbanes-Oxley Act.