Referring to the cash flow statements from 1997 and 2005 in Exhibits 2 & 6, does the change in the balance sheet accounts (Exhibits 4 & 8) agree with what is reported in the statement of cash flows? Why do you think they do or do not articulate in each of these years? Be sure to explain your answers in summary form and list the additions/subtractions and where from the cash flows these numbers are being pulled from for your final calculation (explain your logic).

 
 

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Exhibit 2: 1997 Statement of Cash Flows OPERATING ACTIVITIES AMAZON.COM, INC. STATEMENTS OF CASH FLOWS (IN THOUSANDS) Net loss..... Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization... Amortization of unearned compensation related to stock options.... Changes in operating assets and liabilities: Inventories. Prepaid expenses and other. Deposits... Accounts payable. Accrued advertising.. Other liabilities and accrued expenses. Net cash provided by (used in) operating activities.... INVESTING ACTIVITIES Maturities of short-term investments. Purchases of short-term investments.. Purchases of fixed assets... Net cash used in investing activities. FINANCING ACTIVITIES Proceeds from initial public offering.. Proceeds from exercise of stock options and sale of common stock......... Proceeds from sale of preferred stock. Proceeds from (repayment of) notes payable and long-term debt...... Financing costs.. Net cash provided by financing activities. Net increase in cash... Cash and cash equivalents at beginning of period.. Cash and cash equivalents at end of period.. YEARS ENDED DECEMBER 31, 1995 1997 $ (27,590) 3,388 1,354 (8,400) (2,977) (20) 29,845 2,856 5,066 3,522 518 200 75,000 (2,304) 122,517 103,562 6,248 $109, 810 1996 ======== $(5,777) 286 -- 5,198 (20, 454) (7,221) (1,214) (22,477) (1,214) 49,103 (554) (307) (146) 2,753 598 1,412 (1,735) -- 231 7,970 8,201 5,252 996 $6,248 ======= $ (303) 19 -- (17) (14) -- 99 (16) ---- (232) (52) (52) -- 1,272 (44) -- 1,228 944 52 $996 ===== Exhibit 2: 1997 Statement of Cash Flows OPERATING ACTIVITIES AMAZON.COM, INC. STATEMENTS OF CASH FLOWS (IN THOUSANDS) Net loss..... Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization... Amortization of unearned compensation related to stock options.... Changes in operating assets and liabilities: Inventories. Prepaid expenses and other. Deposits... Accounts payable. Accrued advertising.. Other liabilities and accrued expenses. Net cash provided by (used in) operating activities.... INVESTING ACTIVITIES Maturities of short-term investments. Purchases of short-term investments.. Purchases of fixed assets... Net cash used in investing activities. FINANCING ACTIVITIES Proceeds from initial public offering.. Proceeds from exercise of stock options and sale of common stock......... Proceeds from sale of preferred stock. Proceeds from (repayment of) notes payable and long-term debt...... Financing costs.. Net cash provided by financing activities. Net increase in cash... Cash and cash equivalents at beginning of period.. Cash and cash equivalents at end of period.. YEARS ENDED DECEMBER 31, 1995 1997 $ (27,590) 3,388 1,354 (8,400) (2,977) (20) 29,845 2,856 5,066 3,522 518 200 75,000 (2,304) 122,517 103,562 6,248 $109, 810 1996 ======== $(5,777) 286 -- 5,198 (20, 454) (7,221) (1,214) (22,477) (1,214) 49,103 (554) (307) (146) 2,753 598 1,412 (1,735) -- 231 7,970 8,201 5,252 996 $6,248 ======= $ (303) 19 -- (17) (14) -- 99 (16) ---- (232) (52) (52) -- 1,272 (44) -- 1,228 944 52 $996 =====

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A balance sheet shows what a company owns in the form of assets and what it owes in the form of liabilities A balance sheet also shows the amount of m... View the full answer