Homework EA 12- HUP Use Apple's financial statements in Appendix A to answer the following Required: 1. is Apple's statement of cash flows prepared under the direct method or the Indirect method? 2. For each fiscal year 2016, 2015 and 2014. Identify the amount of cash provided by operating activities and cash paid for dividends 3. In 2016, does Apple have sufficient cash flows from operations to pay dividends? 4. Did Apple spend more or less cash to repurchase common stock in 2016 versus 2015? Complete this question by entering your answers in the tabs below. Required: Required 2 Required) Required* Is Apple's statement of cash flows prepared under the direct method or the indirect method Apple's statement of cash flow Rome Required 2 A-2 Appendo A Financial Statement information September 26, 2015 s 21,120 16.89 Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 24, 2016 ASSETS Current Chand cash equivalents 20.484 Short-term marketable securities 16,671 Accounts receivable. lees allowances of $53 and 563, respectively 15.754 laves 2.13 Vender contrade receivables 13.545 Other current KZEU Total current assets 106,69 Longmable securities 170.430 Property, plant and equipment, net 27.010 5.414 Aequired intangible assets, bet 3.206 Other mon current assets 3,757 Total 321.686 13.494 15.085 164.00 22.471 5.116 33893 3422 20:345 35.490 25.11 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable Accrued expenses Defendeve Commercial paper Current portion of long-term debt Total current liabilities Delmed venue, -current Long-term debe Other Boncurrent liabilities Tollabilities Comments and contingencies Shareholders equity Comstock and additional paid-in capital, 50.00001 par value: 12,600,000 shares toured: 5.336,166 and 5.578.753 shares issued and standing. pectively Read earnings Acould be compete income (1) Tocal durcholders' equity 37,294 22.027 8.08D 8.105 3.500 79,006 2.930 75,427 36,074 193.437 2.500 0510 614 See accompanying Notes to Consolidated Financial Statements Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS APPL Years ended Net als Cost ofte Gamin Swer 7, 2014 10 30337 Research and development Selline, mine Total penting expenses Opening income 100 14,194 25 11.99 11.30 61.13 15A 45687 19.12 Income before price Previsiones Netth.com Emin per shume B Dated Sharsed in computing carning per shume $ 5 9.22 372 5.470320 50021 218 5,753,421 50.00 Die Canh dividends declared per common share See accompanying Nickes Consolidated Facial Sect. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME is millions) Year ended September 24, 2016 September 26, 2015 September 27, 2014 Net income 45.687 5 53.394 5 39.510 Other comprehensive income Class) Change in foreign currency translation set of tax effects of S8.5201 and 550, rupectively 75 (137) Change in trained rain losses cm derivative Instruments Change in fair value of derivatives, net of tax benefit expense) of C7), 5(441) and (297), respectively 7 2905 1.190 Adjustment for net(gain) losses realised and included in net income net of tax expense benefit of $131, 5630 and (36), respectively 1:49 Total change in unrealized gainosex on derivative instruments, net of tax (736) 1.599 Chunpe in malind gain losses on marketable securities Change in fair value of marketable securities, net of tax benefit (expense) of (863), 5264 and S(153), respectively 150 Adjustment for net (pain) losses realized and included in set income, nef of tax expense benefit of 531), 502) and 571, respectively Total change in realid gainosies on marketable securities net of tax 151 1,583 Total other comprehensive income (los) Total comprehensive income 46.666 51,957 als See accompanying Notes to Cated cial Total Shareholders uity 121.549 19.510 1.553 (11,215) (45.000) (448) Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of swes which are reflected in the unde) Accumulated Other Common Stock and Comprehensive Additional Paid In Capital Retained Income Shares Amount Earnings (1.0 Balances as of September 28, 2013 6.294,194 19,764 104256 (471) Net income 39,510 Other comprehensive income (los) 1,553 Dividends and dividend equivalents declared (11.215) Repurchase of common stock (488.677) (45.000) Share based compensation 2,863 Common stock det of shares withheld for employee taxes 60.144 099) To benefit from equity awards, including transfer pricing adjustments 735 Balances as of September 27, 2014 5.866,161 23,313 87.152 LON Net income 53,194 Other comprehensive income (los) (1.427) Dividends and dividend equivalents declared Repurchase of common stock (325.032) M6,026) Share-based compensation 3.586 Common lock issued, net of shares withheld for employee taxes 37,624 (231) Ties benefit from equity awards, including transfer pricing adjustments 748 Balances of September 26, 2015 557,753 $ 27.416 5 92.284 (345) S Net income 45.687 Other comprehensive income dos) 979 Dividends and dividend equivalent declared (12.183) Repurchase of common stock (279.609) (29.000) Share-based compensation 4.262 Common sockised, net of shares withheld for employee tunes 37.002 (6) The benefit from equity wards, including ansfer pricing dastments 370 SM1665 11.251 Balances ms of September 24, 2016 164 See companying Notes to Consolidated Financial Statements 735 111547 53.394 (1.427) (11.627) (36,026) 2586 (840) 119, 155 45.637 979 (29.000 (419) 138,249 APPLE September 17, 2014 14.20 19.510 7.900 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS la millions) Years ended September 24, 2016 September 16, 2015 Cash and cash equivalents, beginning of the you 21.120 5 11544 Operating activities Net income 50.191 Adjects to reconcile etc to cashed by operating activities Depreciation and mortization 10:50 10257 Share based compensation expense 4.210 15 Deed income tax expre 4.938 Changes in operating and liabilities Accounts receivable et 1.000 611 laves 217 (238) Vendor non-trade receivables (51) 0.715) Other current loc 1.00 (1791 Accounts 1.791 5.400 Deferred 01.550 100 Other current and current liabilities 2.104) 3.746 Chwed type IV 27 (4.232) 0765 .220) 5918 1,460 6010 99,713 (14222 21.258 16.40 14.51 LOT (297) (12.7M) (14) 27.12 18.10 1.11 7613 CUTI 00 (10 (141) 26 (110) (497) Purchases of curities Proceeds from ease of marketable securities Prices from sales of marketable Payments made in the with som, Poments for quition of property, lindiment Payments for inition of alle asets Pirms for resten Other Cated in investing activities Financing activities Proceeds from cance of Mock Excess tax benefits from equity awards Pay for and to share ilmesto quity Payment for dividends and dividend equivalents Res.com och Procedurance of the lupamento em dete Change in commercial proper met 543 70 7 (1.1993 (11.561) 11.136 495 401 01.3203 (12.150) 29.722 34954 2.Soch (197) (20,483) (16) 20 NG 2.191 (17) 7276 44155 Incredere in cash cashvile 323 100 Soppalco disclosure Cash paid for increases , tai Cab paid for it 5 5 10,441 1,316 5 5 5 See y Nuesto Coded Financiament A Dividends The Company declared and paid cash dividendo por share during the periods pesented as follows 2016 The Amet Aa| Per Share on mi) Shared 50:57 5 505 0.37 2.11 053 2997 6.52 279 0.52 0. 2.750 2.18 $ 1.63 TLATE bases the categorization within the horuchy upon the low est level of input that is available and significant to the fair value measurement Level I-Quoted prices in active markets for identical assets of liabilities Level 2. Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 ---Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability The Company's valuation techniques used to measure the fair value of money market funds and certain marketable equity securities were derived from quoted prices in active markets for identical assets or liabilities. The valuation techniques used to measure the fair value of the Company's debt instruments and all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model-driven val uations using significant inputs derived from or corrobo rated by observable market data. In accordance with the fair value accounting require ments, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any el gible financial instruments Acered Warranty and Indemnification The following table shows changes in the Company's c. crued warranties and related costs for 2016 and 2015 (in Segment Information and Geographic Data Net sales by product for 2016, 2015 and 2014 are as follows in millions) 2016 2015 2014 5136,200 5155.041 STOLI 200 21221 MA 29,631 25471 3407 Services 19.000 IROS 11.10 ON Total SI569 $933.715 SIR2795 The following table shows information by reportable oper ating segment for 2016, 2015 and 2014 (in millions 2016 America Net als $16.613 S. S80023 Operating come 52172 Hope Nese 5.3 Operating more 515.30 51632 51444 China Net SEX 192 SS15 5315 Operating income 521.000 SI Japan Nit des $16.2008 SI5.306 Operating me 57,165 $ 7,617 5600 RAP Na 513.654 SIS. 11.18 2015 2016 lleginning accrund wartety odchodcots 34760 Cosa daim (6,603 Acer for product wat 1. Ending accrued any and de 5,70 5002 54.780 LaTerm Debt As of September 24, 2016, the Company had outstanding floating and fixed rate notes with varying maturities for an regate principal amount of $78.4 billion (collectively the "Notes"). The Notes tre senior unsecured obligations, and interest is payable in areas The Company recognized 1.4 billion, 5722 million and $381 million of interest expose on its term det for 2016, 2015 and 2014. respectively As of September 24, 2016 and September 26, 2015, the fair value of the Company's Notes, based on Level 2 inputs. was 81.7 billion and 5549 hilion, respectively A reconciliation of the Company's eyment operating in - come to the Consolidated Statements of Operations for 2016. 2015 and 2014 is as follows fin million 2016 2015 2014 SO SUSO Research and (1005) IND 0001 11 141 Top 50 511710