ACC205 Week 2 Assignment
ACC205 Week 2 Assignment
Popular in Course
verified elite notetaker
Popular in Department
This 0 page Study Guide was uploaded by kimwood Notetaker on Friday November 13, 2015. The Study Guide belongs to a course at a university taught by a professor in Fall. Since its upload, it has received 20 views.
Reviews for ACC205 Week 2 Assignment
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 11/13/15
Week 2 Assignment 1 Week 2 Assignment Financial Statement Case Darlene Solano ACC205 Principles of Accounting 1 Instructor Robert Carr October 2 2010 Week 2 Assignment 2 Week 2 Assignment Financial Statement Case The assignment for this week is titled Financial Statement Case The financial records that we will be using for this assignment are based on Amazoncom The instructions for the assignment are quite simple First we are to read chapters 3 and 4 in our textbook to understand the material we will be looking at for this assignment Then we are to familiarize ourselves with Appendix A found at the end of our textbook By using the balance sheet we can familiarize ourselves with the company s assets and liabilities in order to answer the following questions 1 Which balance sheet format does Amazoncom use Amazoncom uses the Classi ed Balance Sheet in Report Form The answer to this question can be found in chapter 4 of our textbook Our textbook explains that the classified balance sheet is used most Horngren amp Harrison p 208 The textbook goes on to explain the two formats used in accounting They are the report form and the account form The report form lists the assets at the top and the liabilities and owner s equity on the below Horngren amp Harrison 2007 p 208 The account form lists the assets at the left and the liabilities and equity at the right Horngren amp Harrison 2007 p 208 When I looked over the balance sheet for Amazoncom I noticed the assets are on top with the liabilities and equity on the bottom This format coincides with the description for report form format 2 Name the company s largest current asset and largest current liability at December 31 2005 Amazon s current largest asset according to the balance sheet is Cash amp Cash Equivalents The balance stated on the balance sheet is 1013 Amazon s current Week 2 Assignment 3 largest liability according to the balance sheet is Accounts Payable with a balance of 1366 Horngren amp Harrison 2007 p A5 3 Compare Amazon s current ratios at December 31 2005 and 2004 Did the current ratio improve worsen or hold steady during 2005 To answer this question I referred to chapter 4 page 210 with the heading Accounting Ratios where is states current ratio measures a company s ability to pay its current liabilities Horngren amp Harrison 2007 To determine a company s current ration you would use the following equation Total current assets diVided by total current liabilities equals current ratio Our textbook goes on to say A strong current ratio is 150 which indicates that the company has 150 in current assets for every 100 in current liabilities A current ratio of 100 is considered low and somewhat risky Horngren amp Harrison 2007 p 210 I calculated Amazon s current ratio for December 31 2005 as being 152 and for 2004 as 157 I took Amazon s current total assets diVided by the total current liabilities In 2005 the total current assets were 2929 The total current liabilities were 1929 Using the above mentioned equation 2929 divided by 1929 it comes out to 152 I used the same equation for the year 2004 to determine that year s current ratio using the figures of total current assets 2239 divided by total current liabilities 1620 with a current ratio of 157 By comparing the two years current ratios Amazon is holding steady For the year 2005 they are in the strong category however compared to the year 2004 they have dipped a little 2004 was a better year To answer the question did the current ratio improve worsen or hold steady during 2005 Amazon is holding steady since they are still in the strong category of 150 or higher Week 2 Assignment 4 Under what category does Amazon report furniture xtures and equipment According to Amazon s balance sheet they list all furniture fixtures and equipment under the heading of Fixed AssetsDepreciation of fixed assets 5 What was the cost of the company s fixed assets at December 31 2005 What was the amount of accumulated depreciation What was the book value of the fixed assets After reviewing Amazon s balance sheet and other financial sheets plus the additional notes section that were available I have determined that their fixed assets for December 31 2005 were 571 The amount of accumulated depreciation as of that date was 223 The book value of the fixed assets is 348 Reference Horngren C amp Harrison W 2007 Accounting 7thed Upper Saddle River NJ Pearson Prentice Hall 4
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'