1a. What does "above the line" vs. "below the line mean"? Why is it an important distinction (and for whom)? Minimum of 100 words.

1b. Using the MSFT financial statements: What are the components of "above the line" and "below the line" (hint: it is not just accounts but also totals and/or subtotals) for 2018 and 2017?

1c. Interpret the results of 2018 "above the line" compared to 2017 "above the line" and then 2017 "below the line" and 2017 "below the line". Use totals where you can so this is high level. I don't want a comparison of account by account, line by line. 150 words MAX.

2a. Summarize the revenue and cost streams of MSFT using the 10K. Specifically note how costs are allocated between the product and service streams. 150 words minimum.

2b. Summarize the revenue recognition policy of MSFT. SUMMARIZE IN YOUR OWN WORDS. DO NOT COPY FROM THE REPORT. 100 words MAX.

2c. Give examples of the revenue recognition for each area as mentioned in the report. This will require using some imagination and your general or learned knowledge about MSFT. The purpose is to see if you really understand the principle and application of revenue recognition. Mention words like transfer of title or ownership and compare to payment. Give it your best shot. 200 words minimum

3. Calculate EBIT and EBITDA for MSFT for 2018 and 2017 Detail the calculation don't just give me an total answer.

4. Using the MSFT financial statements, calculate the variance for the balances listed below (some are clearly stated and some you might have to calculate). The answer must include:

% change from 2017 to 2018 $ change from 2017 to 2018 you must state whether it is a favorable or unfavorable variance from 2017 to 2018

Cost of services

Selling, general, administration and other

Gross Profit of services

Gross Profit of products

5. Here is the 10K for Microsoft Corporation

Actions

. Go to the financial statements and provide for me the balance of total deferred revenue for Microsoft at 2018 and 2017 (Hint: Do not be thrown by the use of alternative terms. As the book states, there are various terms used for different line items and accounts and sub totals. Emphasizing the important point, you must understand the terms, not just memorize them).

4a. Explain in your own words, what is in the balance of deferred revenue (hint: refer to the footnotes of the financial statements in the Microsoft 10K