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• Estimate the percentage of Amazon's Sales ending up as Net Income (Loss).

The equation would be 100 times (Net Income / Total Sales). So with this being said, we must take the Net Income (11,588) and Net Sales (280,522) for 2019 in order to determine the proportion of Amazon's Sales that result in Net Income (Loss) for the year. To arrive at a percentage of 4.13%, we next divide the Net Income by the Net Sales.

• Estimate the percentage of Amazon's Sales going to pay for the costs of the goods being sold.

The gross profit margin is often expressed as the cost of goods sold (COGS) as a percentage of sales. Depending on the product mix, pricing strategy, and other elements, this can change for Amazon. Amazon had a gross profit margin of about 40% as of my most recent knowledge update in September 2021, which means that about 60% of its sales were used to pay for the costs of goods supplied.

• Summarize the specific criteria necessary before Amazon will recognize a sale as having been completed, and record the related revenue.

To ensure accurate revenue recognition, Amazon adheres to accounting rules such Generally Accepted Accounting Principles (GAAP) or International Financial Reporting rules (IFRS).

• Discuss how Amazon accounts for (reports on its income statement) the shipping costs it incurs to ship goods to its customers.

Shipping charges are included in operational expenditures on Amazon's financial statement. The shipment fees fall under the "Fulfillment" or "Shipping" category. These expenses relate to the logistics and delivery of goods from Amazon's fulfillment facilities to the final consumers. Amazon is renowned for its flexible pricing and shipping policies, and it may modify its shipping costs to reflect changing market dynamics and customer demands.

Answer rating: 100% (QA)

Amazon accounts for shipping costs on its income statement by categorizing them as operational exp... View the full answer