Financial Reporting Problem: Apple Inc. CT9. The financial statements of Apple Inc. are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company's website Instructions Answer the following questions. 2. What were the total cost and book value of property, plant, and equipment at September 29, 2018? b. Using the notes to the financial statements, what method of depreciation laused by Apple for financial reporting purposes? c. What was the amount of depreciation and amortization expense for each of the 3 years 2016-2018? lint. Use the statement of cash flows) d. Using the statement of cash flows, what are the amounts of property, plant, and equipment purchased in 2018 and 2017? Comparative Analvale Dehlam. Daneira A-2 APPENDIX A Specimen Financial Statements: Apple Inc. Apple Inc Consolidated Statements of Operations (in millions, except number of shares which are reflected in thousands and pershane amounts) Z Net sales Cost of sales Gross margin Vears ended September 29, September 30, September 2015 2017 2013 $265.595 161.756 141048 100 16 Operating expenses Research and development Selling general and administrative Total operating expenses 14.194 14,216 16.705 30.041 11.581 15.261 2842 2009 2005 50.2024 1.US Operating income Other income (expense), net Income before provision for income taxes Provision for income taxes Net income 72.903 13,372 59,531 2,745 61,089 15.738 548,351 61,372 15.685 45.687 Earnings per share: Basic Diluted $ 12.01 $ S 9.27 9.21 8.35 8.31 $ 11.91 5 Share used in computing earnings per share: Basic Diluted 4,955.377 5217.242 5.251.692 5.470 581 5.000,109 See accompanying Notes to Consolidated Financial Statements APPENDIX A Specimen Financial Statements Apple Inc A-3 Apple Inc Consolidated Statement of Comprehensive Income (in million) September 29 2015 $94.531 Sans ended September 3019 SAR September 24 2016 545 Net Income Other comprehensive income/los Change in foreign currency translation, net of tax effects of I)K77) and 58, respectively 35 234 Change in unrealised paint/oses on derivative Instruments Chinein fair value of derivatives, net of tax benefit expense of $149.547) and respectively Adjustment for net(gains/les realized and included in set income, net of tax expense benefit of $(104) 5475 and 5131. respectively Tocal change in unrealised ainuloses ondemnative instrumente net of tax (1,47 1941 (954) os (162) 13,407) 1.52 Change in unrealised gains losses on marketable securities Change in fair value of marketable securities, net of benefit (expense of 1.156.5435 and S863), respectively Adjustment for net (painalosses toalued and included in net income net of tax expense benefit of $21.535 and 31). respectively Total change in unrealised gins/losses on marketable securities, net of tax 56 (3.406) (846) (784) Total other comprehensive income Total comprehensive income (3.626) 556,50 90 546,666 $17.567 See accompanying Notes to Consolidated Financial Statements A4 APPENDIX A Specimen Financial Smartline Ale Can Shaw infected in thousand NE ASSETS Cash and cheque Murter Accm 2 17.5 US 17, 25 Vendredi Other 1265 11 10 1941 3370 Non can Marketer Property at and quien Other non current Dialoacarlet To 23.356 16723 674 5175319 LIABILITIES AND SHAREHOLDERS' EQUITY: SS Current lite Accounts payable Other can be Defen Copper Termdebt Tal current lite 7,543 11.964 4.714 116 5 44.34 0351 9.548 11.977 6,496 100,814 2,797 Non current Defende Teymdele Other current liabilities Tous ne current lines Total 2.36 97.207 93.735 45.180 141,712 40,415 140.454 241.272 258,578 Commiments and contingencies Shurhelder equity Commons and deal pidin til para: 12.600.000 share this 40 shared and anting, respectively Retained in Armed the comprehensive income Thashardes equiry and shareholde equity 0,201 70,400 4543 107.147 $365725 35,867 98.330 (150) 194,047 5375.319 See accompanying Notes to Cowdated Financial Statements APPENDIX A Speciale in AS Apple Inc. Cated tents of Sharder (in member of shares which are reflected in the end per har mat) Acted Commock and Othe Addin Capital Heid Corse Twal Shareholder Share Am Erwing Income Equity Base 2, 2013 3.57,753 337,456 5 145 Nene Other comprehensive dendi anda declared SU Repure como G. 22.000 C. Share based Comstock of shares withheld for employee The benefit from equity awards incrunder pricing 379 Halance of September 24, 2016 31.153 64 Nenose 43 Other compachew items) (784 (741 Dividends and deliver dectar per USU CH 02. Repurchase of comme Sharewed comparation 4.500 40 Com stod det of states withheld for employees 331 (149) Tax bottom including fericing adjustment Balance of September 2017 3.126 35.11 30 (130) 134047 Cumulative effect of changin accounting principle 21 Net income 54.331 98.531 Other comprehensive income c. 13.0 Dividends and dividend valents declared2 pershare! (725) 13.7159 Repurchase of common stock 5. 03.05 54 5.44 Share besede Conmonokised, net of shares withheld for employer 4 1.10 02.05) 75 300.301 570,400 0.454) 5107247 Balance of September 29, 2016 See accompanying Nous to consolidated Financial Statements 3001 AG APPENDIX A Special Statements Ale Apple Consolidated Statement of Cash Flows Eiwit) Hana September September 36 September 10. ho (441) (104 217 15.30) 3 00100 (4 175 (636) L125 1055 2119 (1556) .. 21 77.434 (15.45 31.775 94 12.451 (142.428) 212 SOS Canchas, beginning of the year Dell givities Net income Agnes to concerncome ocuh tentang Depreciation and more Share-bused competics Deferred income tax expend) Other Changes in operating and its Accounts receivable, net Inventories Vendor non-trade Other current and non-camente Accounts payable Deferred Other current on current sites Cash generated by operating activities Investing activities Purch of marketable securities Proceeds froes matus of the securities Proceeds from a marketable securities Payments for acquisition of property, plant and equipment Payments made in connection with business squisition, met Purchases of narketable securiti Proceeds from no marketable securities Other Canli generated by used inimesting activities Financing activities Proceeds from issuance of common stock Payments for a related to net share settlement of equity awards Payments for dividends and dividend equivalents Nepurchases of common stack Proceeds from imance of term debet, net Repayments of serm debt Change in commercial paper, net Cash used in financing activities Increase/Decrease in cash and cash equivalents Cash and cash equivalents, end of the year Supplemental cash flow disclosure Cash paid for income taxes, et Cash paid for interest (71.4) 51 47. (120) (721) (1.671) 353 (745) 16.066 (7) 16 (521) 126 (124) (424) (46.416) (45,977) 660 (2.527) (13.712) (72,738) 6.99 (6,500) (37) (87876) 5,624 $25,913 555 1.574) (12.769) 32900) 28.662 (3.500) 3.852 (17.974) (195) $20.289 495 (1.370) (12.150) (29,722) 24,954 (2.300) (397) (20,8903 (636 520.454 $10.417 $ 1022 511,591 $ 2,092 S10.444 $ 1,316 See accompanying Notes to Consolidated Financial Statements. Financial Reporting Problem: Apple Inc. CT9. The financial statements of Apple Inc. are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available at the company's website Instructions Answer the following questions. 2. What were the total cost and book value of property, plant, and equipment at September 29, 2018? b. Using the notes to the financial statements, what method of depreciation laused by Apple for financial reporting purposes? c. What was the amount of depreciation and amortization expense for each of the 3 years 2016-2018? lint. Use the statement of cash flows) d. Using the statement of cash flows, what are the amounts of property, plant, and equipment purchased in 2018 and 2017? Comparative Analvale Dehlam. Daneira A-2 APPENDIX A Specimen Financial Statements: Apple Inc. Apple Inc Consolidated Statements of Operations (in millions, except number of shares which are reflected in thousands and pershane amounts) Z Net sales Cost of sales Gross margin Vears ended September 29, September 30, September 2015 2017 2013 $265.595 161.756 141048 100 16 Operating expenses Research and development Selling general and administrative Total operating expenses 14.194 14,216 16.705 30.041 11.581 15.261 2842 2009 2005 50.2024 1.US Operating income Other income (expense), net Income before provision for income taxes Provision for income taxes Net income 72.903 13,372 59,531 2,745 61,089 15.738 548,351 61,372 15.685 45.687 Earnings per share: Basic Diluted $ 12.01 $ S 9.27 9.21 8.35 8.31 $ 11.91 5 Share used in computing earnings per share: Basic Diluted 4,955.377 5217.242 5.251.692 5.470 581 5.000,109 See accompanying Notes to Consolidated Financial Statements APPENDIX A Specimen Financial Statements Apple Inc A-3 Apple Inc Consolidated Statement of Comprehensive Income (in million) September 29 2015 $94.531 Sans ended September 3019 SAR September 24 2016 545 Net Income Other comprehensive income/los Change in foreign currency translation, net of tax effects of I)K77) and 58, respectively 35 234 Change in unrealised paint/oses on derivative Instruments Chinein fair value of derivatives, net of tax benefit expense of $149.547) and respectively Adjustment for net(gains/les realized and included in set income, net of tax expense benefit of $(104) 5475 and 5131. respectively Tocal change in unrealised ainuloses ondemnative instrumente net of tax (1,47 1941 (954) os (162) 13,407) 1.52 Change in unrealised gains losses on marketable securities Change in fair value of marketable securities, net of benefit (expense of 1.156.5435 and S863), respectively Adjustment for net (painalosses toalued and included in net income net of tax expense benefit of $21.535 and 31). respectively Total change in unrealised gins/losses on marketable securities, net of tax 56 (3.406) (846) (784) Total other comprehensive income Total comprehensive income (3.626) 556,50 90 546,666 $17.567 See accompanying Notes to Consolidated Financial Statements A4 APPENDIX A Specimen Financial Smartline Ale Can Shaw infected in thousand NE ASSETS Cash and cheque Murter Accm 2 17.5 US 17, 25 Vendredi Other 1265 11 10 1941 3370 Non can Marketer Property at and quien Other non current Dialoacarlet To 23.356 16723 674 5175319 LIABILITIES AND SHAREHOLDERS' EQUITY: SS Current lite Accounts payable Other can be Defen Copper Termdebt Tal current lite 7,543 11.964 4.714 116 5 44.34 0351 9.548 11.977 6,496 100,814 2,797 Non current Defende Teymdele Other current liabilities Tous ne current lines Total 2.36 97.207 93.735 45.180 141,712 40,415 140.454 241.272 258,578 Commiments and contingencies Shurhelder equity Commons and deal pidin til para: 12.600.000 share this 40 shared and anting, respectively Retained in Armed the comprehensive income Thashardes equiry and shareholde equity 0,201 70,400 4543 107.147 $365725 35,867 98.330 (150) 194,047 5375.319 See accompanying Notes to Cowdated Financial Statements APPENDIX A Speciale in AS Apple Inc. Cated tents of Sharder (in member of shares which are reflected in the end per har mat) Acted Commock and Othe Addin Capital Heid Corse Twal Shareholder Share Am Erwing Income Equity Base 2, 2013 3.57,753 337,456 5 145 Nene Other comprehensive dendi anda declared SU Repure como G. 22.000 C. Share based Comstock of shares withheld for employee The benefit from equity awards incrunder pricing 379 Halance of September 24, 2016 31.153 64 Nenose 43 Other compachew items) (784 (741 Dividends and deliver dectar per USU CH 02. Repurchase of comme Sharewed comparation 4.500 40 Com stod det of states withheld for employees 331 (149) Tax bottom including fericing adjustment Balance of September 2017 3.126 35.11 30 (130) 134047 Cumulative effect of changin accounting principle 21 Net income 54.331 98.531 Other comprehensive income c. 13.0 Dividends and dividend valents declared2 pershare! (725) 13.7159 Repurchase of common stock 5. 03.05 54 5.44 Share besede Conmonokised, net of shares withheld for employer 4 1.10 02.05) 75 300.301 570,400 0.454) 5107247 Balance of September 29, 2016 See accompanying Nous to consolidated Financial Statements 3001 AG APPENDIX A Special Statements Ale Apple Consolidated Statement of Cash Flows Eiwit) Hana September September 36 September 10. ho (441) (104 217 15.30) 3 00100 (4 175 (636) L125 1055 2119 (1556) .. 21 77.434 (15.45 31.775 94 12.451 (142.428) 212 SOS Canchas, beginning of the year Dell givities Net income Agnes to concerncome ocuh tentang Depreciation and more Share-bused competics Deferred income tax expend) Other Changes in operating and its Accounts receivable, net Inventories Vendor non-trade Other current and non-camente Accounts payable Deferred Other current on current sites Cash generated by operating activities Investing activities Purch of marketable securities Proceeds froes matus of the securities Proceeds from a marketable securities Payments for acquisition of property, plant and equipment Payments made in connection with business squisition, met Purchases of narketable securiti Proceeds from no marketable securities Other Canli generated by used inimesting activities Financing activities Proceeds from issuance of common stock Payments for a related to net share settlement of equity awards Payments for dividends and dividend equivalents Nepurchases of common stack Proceeds from imance of term debet, net Repayments of serm debt Change in commercial paper, net Cash used in financing activities Increase/Decrease in cash and cash equivalents Cash and cash equivalents, end of the year Supplemental cash flow disclosure Cash paid for income taxes, et Cash paid for interest (71.4) 51 47. (120) (721) (1.671) 353 (745) 16.066 (7) 16 (521) 126 (124) (424) (46.416) (45,977) 660 (2.527) (13.712) (72,738) 6.99 (6,500) (37) (87876) 5,624 $25,913 555 1.574) (12.769) 32900) 28.662 (3.500) 3.852 (17.974) (195) $20.289 495 (1.370) (12.150) (29,722) 24,954 (2.300) (397) (20,8903 (636 520.454 $10.417 $ 1022 511,591 $ 2,092 S10.444 $ 1,316 See accompanying Notes to Consolidated Financial Statements