Refer to the financial statements of Apple in Appendix A to answer the following. 1. What percent

Question:

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

1. What percent of the original cost of Apple’s property and equipment remains to be depreciated as of (a) September 24, 2016, and (b) September 26, 2015? Assume these assets have no salvage value. (Note: Accumulated Depreciation is listed under “Property, Plant and Equipment” in the notes to Apple’s financial statements in Appendix A.)

2. Much research and development is needed to create the next iPhone. Does Apple capitalize and amortize research and development costs over the life of the product, or are research and development costs expensed as incurred?

3. Compute Apple’s total asset turnover for the year ended (a) September 24, 2016, and (b) September 26, 2015. Assume total assets at September 27, 2014, are 231,839 ($ millions).

4. Using the results in part 3, is Apple’s asset turnover on a favorable or unfavorable trend?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.

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