Just fill in the Blanc spaces in the bottom of the exercise by using BSE to record it, please ask questions if you need more help.
Question 4 (30 points): 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." Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24 2016 September 26, 2015 Net income $ 48,351 $ 45,687 S 53 394 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of $(77). $8 and $201. respectively 224 75 (411) 1,315 7 2.905 Change in unrealized gains/osces on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of $(478), 5(7) and $(441), respectively Adjustment for net gains Mosses realized and included in net income, net of tax expense/(benefit) of $475, $131 and $630, respectively Total change in unrealized gains/losses on derivative instruments, net of tax (1,477) (741) (3,497) (162) (734) (592) ) (782) 1,582 (483) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefitexpense) of $425, $(863) and $264, respectively Adjustment for net (gains Mosses realized and included in net income net of tax expenselbenefit) 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 incomelloss) Total comprehensive income (784) 47,567 $ (1.427) 51.967 $ 46,666 $ See accompanying Notes to Consolidated Financial Statements Apple Inc. 1 2017 Form 10-K 140 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 Question 4 (30 points): 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." Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24 2016 September 26, 2015 Net income $ 48,351 $ 45,687 S 53 394 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of $(77). $8 and $201. respectively 224 75 (411) 1,315 7 2.905 Change in unrealized gains/osces on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of $(478), 5(7) and $(441), respectively Adjustment for net gains Mosses realized and included in net income, net of tax expense/(benefit) of $475, $131 and $630, respectively Total change in unrealized gains/losses on derivative instruments, net of tax (1,477) (741) (3,497) (162) (734) (592) ) (782) 1,582 (483) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefitexpense) of $425, $(863) and $264, respectively Adjustment for net (gains Mosses realized and included in net income net of tax expenselbenefit) 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 incomelloss) Total comprehensive income (784) 47,567 $ (1.427) 51.967 $ 46,666 $ See accompanying Notes to Consolidated Financial Statements Apple Inc. 1 2017 Form 10-K 140 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 Question 4 (30 points): 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." Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24 2016 September 26, 2015 Net income $ 48,351 $ 45,687 S 53 394 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of $(77). $8 and $201. respectively 224 75 (411) 1,315 7 2.905 Change in unrealized gains/osces on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of $(478), 5(7) and $(441), respectively Adjustment for net gains Mosses realized and included in net income, net of tax expense/(benefit) of $475, $131 and $630, respectively Total change in unrealized gains/losses on derivative instruments, net of tax (1,477) (741) (3,497) (162) (734) (592) ) (782) 1,582 (483) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefitexpense) of $425, $(863) and $264, respectively Adjustment for net (gains Mosses realized and included in net income net of tax expenselbenefit) 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 incomelloss) Total comprehensive income (784) 47,567 $ (1.427) 51.967 $ 46,666 $ See accompanying Notes to Consolidated Financial Statements Apple Inc. 1 2017 Form 10-K 140 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 Question 4 (30 points): 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." Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24 2016 September 26, 2015 Net income $ 48,351 $ 45,687 S 53 394 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of $(77). $8 and $201. respectively 224 75 (411) 1,315 7 2.905 Change in unrealized gains/osces on derivative instruments: Change in fair value of derivatives, net of tax benefit/(expense) of $(478), 5(7) and $(441), respectively Adjustment for net gains Mosses realized and included in net income, net of tax expense/(benefit) of $475, $131 and $630, respectively Total change in unrealized gains/losses on derivative instruments, net of tax (1,477) (741) (3,497) (162) (734) (592) ) (782) 1,582 (483) Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefitexpense) of $425, $(863) and $264, respectively Adjustment for net (gains Mosses realized and included in net income net of tax expenselbenefit) 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 incomelloss) Total comprehensive income (784) 47,567 $ (1.427) 51.967 $ 46,666 $ See accompanying Notes to Consolidated Financial Statements Apple Inc. 1 2017 Form 10-K 140 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
