The Amazon.com financial statements appear in Appendix A at the end of this book. Answer the following questions about Amazon’s stock. The Accumulated Deficit account is Retained earnings with a negative (debit) balance.

Requirements

1. How much of Amazon’s preferred stock was outstanding at December 31, 2009? How can you tell?

2. Examine Amazon’s balance sheet. Which stockholders’ equity account increased the most during 2009? What caused this increase? The Consolidated Statements of Stockholders’ Equity helps to answer this question.

3. Use par value and the number of shares to show how to compute the balances in Amazon’s Common stock account at the end of both 2009 and 2008, as shown in the balance sheet.

4. Would it be meaningful to compute Amazon’s return on equity? Explain your answer.