Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Research Case - Locate and extract relevant information for a financial reporting issue; integrative; Microsoft Corporation
A meeting of your accounting department is scheduled for early tomorrow morning. One topic of discussion is certain to be the appropriate adjustments to net income in your company's statement of cash flows using the indirect method of reporting operating activities. Hallway discussions have suggested some degree of uncertainty, particularly regarding unearned revenues, which are substantial for the company. Because your firm went public only seven months ago, this reporting issue is a new one for you and most other members of the department. In preparation for the meeting, you sought out the financial statements of Microsoft Corporation, knowing that it too had substantial unearned revenues. The operating activities section of the comparative statements of cash flows for Microsoft is presented below.
Cash Flows Statements (in millions)
Year Ended June 30,
2009
2008
2007
Operations
Net income
$14,569
$17,681
$14,265
Adjustments to reconcile net income to net cash from operations:
Depreciation, amortization, and other noncash items
2,562
2,056
1,440
Stock-based compensation
1,708
1,479
1,550
Net recognized losses (gains) on investments and derivatives
683
(572)
(292)
Excess tax benefits from stock-based compensation
(52)
(120)
(77)
Deferred income taxes
762
935
421
Deferral of unearned revenue
24,409
24,532
21,032
Recognition of unearned revenue
(25,426)
(21,944)
(19,382)
Changes in operating assets and liabilities:
Accounts receivable
2,215
(1,569)
(1,764)
Other current assets
(422)
153
232
Other long-term assets
(273)
(98)
(435)
Other current liabilities
(3,371)
(748)
(552)
Other long-term liabilities
1,673
173
1,558
Net cash from operations
19,037
21,612
17,796
Required:
1. Locate the financial statements of Microsoft Corporation on the Internet. Search the disclosure notes for information about how Microsoft accounts for its unearned revenues. How is the undelivered portion of Microsoft's sales of Windows XP Professional recorded initially?
2. Why does the statement of cash flows include "unearned revenue" as an addition to net income in the operations section? Why is "recognition of unearned revenue" included as a deduction from net income? Why do you think Microsoft reported these two items separately rather than just adjusting net income for the change in the unearned revenue account balance?
3. Why is stock-based compensation added to net income?
Describe a typical accounting cycle throughout a month. What personnel in the company are performing each function and why
felicia amp fredrsquos executive board has asked you to change the decision model previously completed to reflect the
The distinction between separately stated and nonseparately stated
engle marine builds 30-foot fiberglass fishing boats which itmarkets through a network of 3rd party dealers on
The company plans to include a safety margin of $20 000 before tax. Assuming a tax rate of 30%, what should be the budgeted sales
the berridge company is a discount tire dealer that operates twenty-five retail stores in a metropolitan area. the
tvm consulting bought new building for its headquarters in the year 2000. the purchase cost was 723198 dollars and in
a firms internal control environment is influenced bymanagements operating style.organizational structure.personnel
The paper should center on similarities and differences that exist among the cases, what has been done to strengthen the audit function
Explain the FIFO and LIFO Inventory Methods. Prepare a report comparing the accounting implications of valuing inventory under FIFO and LIFO methods of a fast moving consumer goods (FMCG) company during a period of rising prices.
On May 1, 2011, Fellenger Enterprises issues bonds dated January 1, 2011, that have a $1,700,000 par value, mature in 20 years, and pay 9% interest.
standards 200 kg material at 4 per kg for 140 kg finished product. actual output 42000 kg material used 56000 kg. cost
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd