Crash Course in Accounting and Financial Statement Analysis, Second Edition

Current versus Long-Term Liabilities

Current liabilities are to be paid within 12 months. Long-term liabilities (such as long-term debt) are not due within the year.

(In millions)
June 30					2004	2005
Assets
Current assets:
	Cash and equivalents				$14,304	$ 4,851
	Short-term investments				46,288	32,900
		Total cash and short-term investments			60,592	37,751
	Accounts receivable, net				5,890	7,180
	Inventories				421	491
	Deferred income taxes				2,097	1,701
	Other				1,566	1,614
		Total current assets			70,566	48,737
Property and equipment, net					2,326	2,346
Equity and other investments					12,210	11,004
Goodwill					3,115	3,309
Intangible assets, net					569	499
Deferred income taxes					3,808	3,621
Other long-term assets					1,774	1,299
			Total assets		$94,368	$ 70,815
Liabilities and stockholders’ equity Current liabilities:
	Accounts payable				$ 1,717	$ 2,086
	Accrued compensation				1,339	1,662
	Income taxes				3,478	2,020
	Short-term unearned revenue				6,514	7,502
	Other				1,921	3,607
		Total current liabilities			14,969	16,877
Long-term unearned revenue					1,663	1,665
Other long-term liabilities					2,911	4,158
Commitments and contingencies
Stockholders’ equity:
	Common stock and paid-in capital - shares authorized 24,000; outstanding 10,862 and 10,710				56,396	60,413
	Retained earnings (deficit), including accumulated other comprehensive income of $1,119 and $1,426				18,429	(12,298)
			Total stockholders’ equity		74,825	48,115
				Total liabilities and stockholders’ equity	$94,368	$ 70,815

Source: Used with permission. Microsoft 2005 Annual Report.

3. Identifying Assets and Liabilities

Exercise Q1: Label each item 1 through ...