The Amazon.com financial statements appear in Appendix A at the end of this book. Answer the following

Question:

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.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...