Apple describes its revenue recognition policy for gift cards as follows:

The Company records deferred revenue when it receives payments in advance of the delivery of products or the performance of services. The Company sells gift cards redeemable at its retail and online stores, and also sells gift cards redeemable on iTunes Store, App Store, Mac App Store, TV App Store and iBooks Store for the purchase of digital content and software. The Company records deferred revenue upon the sale of the card, which is relieved upon redemption of the card by the customer.

In the following questions, assume that each gift card is worth $79 and that in 2017 Apple sold 800,000 gift cards for a total of $63.2 million.

Use the BSE below to record the following transaction:

Apple sells $63.2 million in gift cards in 2017.

Cash: ______

+ Non-cash Assets ________

• Contra Assets ________

=

Liabilities: __________

+ Shareholders Equity __________

Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, September 24, September 26, 2017 $ 48,351 $ 45,687 S 53,394 2016 2015 Net income Other comprehensive income/floss): Change in foreign currency translation, net of tax effects of S(77). S8 and $201, respectively 224 75 (411) 1,315 7 2,905 Change in unrealized gaine/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of S(478). $(7) and S(441), respectively Adjustment for net (gains)losses realized and included in net income net of tax expense/(benefit of $475, 8131 and 5630, respectively Total change in urrealized gains/losses on derivative instruments, net of tax (1.477) (741) (3,497) (162) (734) (592) (782) 1,582 (483) Change in unrealized gainalosses on marketablo securities: Change in fair value of marketable securities, net of tax benefit(expense) of $425, 8(863) and $264, respectively Adjustment for not (gains losses realized and included in net income, not of tax expensel(benefit) of $35, $(31) and $(32), respectively Total change in unrealized gains/losses on marketable securities, net of tax (64) 56 59 (846) 1,638 (424) 979 Total other comprehensive incomellose) Total comprehensive income (784) 47,5675 46,666 $ (1.427) 51,967 See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 2017 Form 10-K 140 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, September 24, September 26, 2017 $ 48,351 $ 45,687 S 53,394 2016 2015 Net income Other comprehensive income/floss): Change in foreign currency translation, net of tax effects of S(77). S8 and $201, respectively 224 75 (411) 1,315 7 2,905 Change in unrealized gaine/losses on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of S(478). $(7) and S(441), respectively Adjustment for net (gains)losses realized and included in net income net of tax expense/(benefit of $475, 8131 and 5630, respectively Total change in urrealized gains/losses on derivative instruments, net of tax (1.477) (741) (3,497) (162) (734) (592) (782) 1,582 (483) Change in unrealized gainalosses on marketablo securities: Change in fair value of marketable securities, net of tax benefit(expense) of $425, 8(863) and $264, respectively Adjustment for not (gains losses realized and included in net income, not of tax expensel(benefit) of $35, $(31) and $(32), respectively Total change in unrealized gains/losses on marketable securities, net of tax (64) 56 59 (846) 1,638 (424) 979 Total other comprehensive incomellose) Total comprehensive income (784) 47,5675 46,666 $ (1.427) 51,967 See accompanying Notes to Consolidated Financial Statements. Apple Inc. I 2017 Form 10-K 140