Refer to Apple's financial statements in Appendix A to answer the following.

Required

1. What amount of inventories did Apple report as a current asset on September 27, 2014? On September 28, 2013?

2. Inventories represent what percent of total assets on September 27, 2014? On September 28, 2013?

3. Comment on the relative size of Apple's inventories compared to its other types of assets.

4. What accounting method did Apple use to compute inventory amounts on its balance sheet?

5. Compute inventory turnover for fiscal year ended September 27, 2014, and days' sales in inventory as of September 27, 2014.

Fast Forward

6. Access Apple's financial statements for fiscal years ended after September 27, 2014, from its website (Apple.com) or the SEC's EDGAR database (www.SEC.gov). Answer questions 1 through 5 using the current Apple information and compare results to those prior years?

Apple's financial statements from Appendix A are below:

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Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 28, 2013 September 27, 2014 ASSETS: Current assets: Cash and cash equivalents Short-term marketable securities Accounts receivable, less allowances of $86 and $99, respectively Inventories 13,844 11,233 17,460 2,111 4,318 9,759 9,806 68,531 14,259 26,287 13,102 1,764 3,453 Deferred tax assets Vendor non-trade receivables 7,539 Other current assets 6,882 73,286 Total current assets Long-term marketable securities Property, plant and equipment, net 130,162 20,624 4,616 4,142 106,215 16,597 Goodwill 1,577 4,179 5,146 207,000 Acquired intangible assets, net Other assets 3,764 231,839 Total assets LIABILITIES AND SHAREHOLDERS’ EQUITY: Current liabilities: Accounts payable Accrued expenses Deferred revenue 30,196 18,453 8,491 22,367 13,856 7,435 Commercial paper Total current liabilities 6,308 63,448 43,658 Deferred revenue – non-current Long-term debt Other non-current liabilities 3,031 28,987 24,826 120,292 2,625 |16,960 20,208 Total liabilities Commitments and contingencies Shareholders' equity: 83,451 Common stock and additional paid-in capital, $0.00001 par value; 12,600,000 shares authorized; 5,866,161 and 6,294,494 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income/(loss) Total shareholders' equity Total liabilities and shareholders' equity 23,313 87,152 1,082 111,547 231,839 19,764 104,256 (471) 123,549 207,000