Prior to beginning work on this discussion, read Amazon.com’s most recent annual report from www.amazon.com (Links to an external site.). In this discussion, we will determine how sales affect Amazon.com’s Income Statement. After opening its virtual doors on the World Wide Web in July 1995, Amazon.com seeks to be Earth’s most customer-centric company. In each segment, Amazon.com serves its primary customer sets, consisting of consumers, sellers, developers, enterprises, and content creators (Amazon.com, 2016 Annual Report).

For your initial post:

  • Go www.amazon.com (Links to an external site.), then select Annual Reports, Proxies and Shareholders Letters, and open Amazon’s most recent annual report.
  • Read the income statement, which Amazon.com names as the “Consolidated Statement of Operations” and in “Note 1—Description of Business and Accounting Policies,” under Notes to Consolidated Financial Statements read the subsections titled “Revenues” and “Cost of Sales.”
  • Then examine Amazon.com’s income statement by addressing the following:
    • Estimate the percentage of Amazon’s Sales ending up as Net Income (Loss).
    • Estimate the percentage of Amazon’s Sales going to pay for the costs of the goods being sold.
    • Summarize the specific criteria necessary before Amazon will recognize a sale as having been completed, and record the related revenue.
    • Discuss how Amazon accounts for (reports on its income statement) the shipping costs it incurs to ship goods to its customers.

Guided Response: Review several of your peer’s posts. In a minimum post of at least 150 words, respond to at least two of your fellow students’ posts in a substantive manner, and provide information that they may have missed or may not have considered in regards their examination of Amazon’s income statement. Do you agree with their findings? Why or why not? You are encouraged to post your required replies earlier in the week to promote more meaningful and interactive discourse in this discussion forum. Continue to monitor the discussion forum until 11:59 p.m. (Pacific Time) on Day 7, and respond with robust dialogue to anyone who replies to your initial post.

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