Expand Your Critical Thinking 2-1

The financial statements of Apple, Inc. for 2015 are presented in Appendix A. Click here to view Appendix A. Instructions for accessing and using the companys complete annual report, including the notes to the financial statements, are also provided in Appendix A. Apples financial statements contain the following selected accounts, stated in millions of dollars.

Accounts Payable		Cash and Cash Equivalents
Accounts Receivable		Research and Development Expense
Property, Plant, and Equipment		Inventories

What is the increase and decrease side for each account?

		Increase Side		Decrease Side
Accounts Payable		DebitCredit		CreditDebit
Accounts Receivable		DebitCredit		DebitCredit
Property, Plant, and Equipment		CreditDebit		DebitCredit
Cash and Cash Equivalents		CreditDebit		CreditDebit
Research and Development Expense		CreditDebit		CreditDebit
Inventories		DebitCredit		CreditDebit

LINK TO TEXT

What is the normal balance for each account?

		Normal Balance
Accounts Payable		CreditDebit
Accounts Receivable		DebitCredit
Property, Plant, and Equipment		DebitCredit
Cash and Cash Equivalents		CreditDebit
Research and Development Expense		CreditDebit
Inventories		CreditDebit

LINK TO TEXT

Identify the probable other account in the transaction and the effect on that account when:

(1)	Accounts Receivable is decreased.		Cash is increasedCash is decreased or Accounts Receivable is increasedCash is decreased or Accounts Payable is increasedCash is decreased
(2)	Accounts Payable is decreased.		Cash is increasedCash is decreased or Accounts Receivable is increasedCash is decreasedCash is decreased or Accounts Payable is increased
(3)	Inventories are increased.		Cash is decreased or Accounts Payable is increasedCash is decreasedCash is increasedCash is decreased or Accounts Receivable is increased

LINK TO TEXT

Identify the other account(s) that ordinarily would be involved when:

(1)	Research and Development Expense is increased.		Cash is decreased or Notes or Accounts Payable is increasedCash is increased or Notes or Accounts Payable is increasedCash is increased or Notes or Mortgage Payable is decreasedCash is decreasedCash is increased
(2)	Property, Plant, and Equipment is increased.		Cash is increased or Notes or Mortgage Payable is decreasedCash is decreasedCash is increasedCash is increased or Notes or Mortgage Payable is increasedCash is decreased or Notes or Mortgage Payable is increased

Click if you would like to Show Work for this question:

Open Show Work