need help with required 2 and appendix A at the bottom.

AA 12-1 Company Analysis LO A1 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 2017, 2016, and 2015, identify the amount of cash provided by operating activities and cash paid for dividends. 3. In 2017, did Apple have sufficient cash flows from operations to pay dividends? 4. Did Apple spend more or less cash to repurchase common stock in 2017 versus 2016? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Is Apple's statement of cash flows prepared under the direct method or the indirect method? Indirect method Apple's statement of cash flow 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 2017, 2016, and 2015, identify the amount of cash provided by operating activities and cash paid for dividends 3. In 2017, did Apple have sufficient cash flows from operations to pay dividends? 4. Did Apple spend more or less cash to repurchase common stock in 2017 versus 2016? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 2 Required 4 For each fiscal year 2017, 2016, and 2015, identify the amount of cash provided by operating activities and cash paid for dividends. (Enter your answers in millions of dollars.) 2017 2016 2015 $ millions Cash provided by operating activities Cash dividends pald September 24, 2016 $ Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 30, 2017 ASSETS Current assets Cash and cash equivalents $ 20,289 Short-term marketable securities 53,892 Accounts receivable, less allowances of $58 and $53, respectively 17,874 Inventories 4,855 Vendor non-trade receivables 17.799 Other current assets 13.936 Total current assets 128.645 Long-term marketable securities 1944,714 Property, plant and equipment, net 33,783 Goodwill 5.712 Acquired intangible assets, net 2.298 Other non-current assets 10.162 Total assets 5 375319 20.484 46,671 15.754 2,132 13,545 8.283 106,869 170,430 27,010 5,414 3,206 8,757 321.686 5 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable Accrued expenses Deferred revenue Collercial purpet Current portion of long-term debt Total current liabilities Deferred revenue, non-current Long term det Other non-current liabilities Total liabilities Commitments and contingencies 49.049 25.744 75 11.977 6.496 100.814 2836 971202 HAS 241.22 37,294 22,027 8,080 8.105 3.500 79.000 2.930 75.422 16.074 198437 Shardsolder equity 2 / 17 - 100% + 11,977 6,496 100,814 2,836 97,207 40,415 241.272 8,105 3,500 79,006 2,930 75,427 36,074 193,437 Commercial paper Current portion of long-term debt Total current liabilities Deferred revenue, non current Long-term debt Other non-current linbilities Total liabilities Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, 50.00001 par value: 12,600.000 shares authorized: 5,126,201 and 5.336,166 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income (loss) Total shareholders equity Total liabilities and shareholders' equity See accompanying Notes to Consolidated Financial Statements. 35,867 98.330 (150) 134,047 375,319 31.251 96,364 634 128.249 321,686 September 26, 2015 S 233,715 140,089 93,626 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 30, 2017 September 24, 2016 Net sales 229,234 $ 215,639 Cost of sales 141,048 131,376 Gross margin 88,186 84.263 Operating expenses Research and development 11.581 10,045 Selling, general and administrative 15,261 14,194 Total operating expenses 26,842 24,239 Operating income 61,344 60,024 Other income (expense), net 2,745 1.348 Income before provision for income taxes 64,089 61,372 Provision for income taxes 15.738 15.685 Net income 48,351 45,687 8,067 14.329 22.396 71.230 1.285 72,515 19.121 53,394 9.28 9.22 S Earnings per share: Basic 9.27 8.35 Diluted 9.21 8.31 Shares used in computing earnings per share: Basic 5,217.242 5.470.820 Diluted 5,251,692 3.500,281 Cash dividends declared per share $ 2.40 $ 2.IN See accompanying Notes to Consolidated Financial Statements 5.753.421 5.793.069 1.98 5 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME to million Years unded September 30, 2017 September 24, 2016 Net income 48331 56 Other comprehensive income (los) Change in foreign currency translation, net of tax effects of 572) S8 and 5201, respectively September 26, 2015 341194 HR CHIVIO perc NO See accompanying Notes to Consolidated Financial Statements. 75 7 Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 30, 2017 September 24, 2016 September 26, 2015 Net income $ 48,351 $ 45,6875 53,394 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of S(77), S8 and 201, respectively 224 Change in unrealized gainiowes on derivative instruments: Change in fair value of derivatives, net of tax benefit (expense) of S(478), $(7) and (441), respectively 1,315 2,905 Adjustment for net(gains) losses realized and included in net income, net of tax expense (bencht) of $475, S131 and $630, respectively (0.477) (741) (3.497) Total change in unrealized yain losses on derivative instruments, net of tax (162) (734) (592) Change in unrealized gaindlosses on marketable securities Change in fair value of marketable securities, net of tax benefit (expense) of $425, 5(863) and $264, respectively 1782) 1.582 183) Adjustment for net(gains) losses realized and included in net income, net of tax expense (benefit of 535,5031), and SO2), respectively (64 Total change in unrealized painloses on marketable securities net of tax (846) 1.63% (424) Total other comprehensive income (m) (784) 979 (1.427) Total comprehensive income 47.567 46.661 51.907 See accompanying Notes to Consolidated Financial Statements 56 30 APPL 11 Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands) Accumulated Other Common Stock and Comprehensive Total Additional Paid In Capital Retained Income Shareholders Shares Amount Earnings (Loss) Equity Balances as of September 27, 2014 5,866,161 $ 23,313 $ 87,152 $ 1,082 $ 111,547 Net income 53,394 53,394 Other comprehensive income (loss) (1.427) (1,427) Dividends and dividend equivalents declared (11,627) (11.627) Repurchase of common stock (325,032) (36,026) (36,026) Share-based compensation 3,586 3,586 Common stock issued, net of shares withheld for employee taxes 37,624 (231) (609) (840) Tax benefit from equity awards, including transfer pricing adjustments 748 748 Balances as of September 26, 2015 5,578,7535 27.416 $ 92,284 5 (345) s 119,355 Net income 45,687 45.687 Other comprehensive income (loss) 979 979 Dividends and dividend equivalents declared (12.188) (12.188) Repurchase of common stock (279,609) (29.000) (29,000) Share-based compensation 4.262 Common stock issued, net of shares withheld for employee taxes 37,022 (806) (419) (1.225) Tax benefit from equity awards, including transfer pricing adjustments 379 379 Balances as of September 24, 2016 5.336,166 s 31.251s 96,364 5 6.34 $ 128.249 Not income 48.151 48,351 Other comprehensive income (loss) (784) (784) Dividends and dividend equivalents declared (12.803) (12.803) Repurchase of common stock (246.496 (33.001) (33.001 Shure-based compensation 4.909 4,909 Common stock issued, nct of shares withheld for employee taxes 36,531 1913) (581) 11.494 Then mit wants includine 4.262 (345) S 979 748 119.355 45,687 979 (12,188) (29,000) 4,262 (1,225) Tax benefit from cquity awards, including transfer pricing adjustments 748 Balances as of September 26, 2015 5.578,753 $ 27,416 $ 92,284 5 Net income 45,687 Other comprehensive income (los) Dividends and dividend equivalents declared (12,188) Repurchase of common stock (279,609) (29.000) Share-based compensation 4,262 Common stock issued, net of shares withheld for employee taxes 37,022 (806) (419) Tex benefit from equity awards, including transfer pricing adjustments 379 Balances as of September 24, 2016 5,336,166 $ 31.251 $ 96,364 $ Net income 48,351 Other comprehensive income (los) Dividends and dividend equivalents declared (12,803) Repurchase of common stock (246,496) (33,001) Share-based compensation 4,909 Common stock issued, net of shares withheld for employee taxes 36,531 (913) (581) Tax benefit from equity awards, including transfer pricing adjustments 620 Balances as of September 30, 2017 15.126,2015 35,867 S 98330 See accompanying Notes to Consolidated Financial Statements 634 S (784) 379 128,249 48,351 (784) (12.803) (33.001) 4.909 (1.494) 620 134,047 50) S September 26, 2015 $ 13,844 53,394 11,257 3586 1.382 385 212 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 30, 2017 September 24, 2016 Cash and cash equivalents, beginning of the year 20,484 $ 21,120 Operating activities Net income 48.351 45,687 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 10,157 10,505 Share-based compensation expense 4,840 4,210 Deferred income tax expense 5.966 4,938 Other (166) 486 Changes in operating assets and liabilities: Accounts receivable, net (2.093) 527 Inventories (2.723) Vendor non-trade receivables (4.254) (SI) Other current and non-current assets (5.318) 1.OSS Accounts payable 9.618 1.837 Deferred revenue (626) (1554) Other current and non-current liabilities (154) K2,033) Cash generated by operating activities 63.598 65,824 Investing activities Purchases of marketable securities (150,486) (1:42.428) Proceeds from maturities of marketable securities 31.775 21,258 Proceeds from sales of marketable securities 94.564 90,536 Payments made in connection with business acquisitions, net (329) (297) Payments for acquisition of property, plant and equipment (2.451) (12.734) Payments for acquisition of intangible assets 3:14) (814) Payments for strategic investments, net (395) 1.388) Other 220 (10) Cash used in investing activities (46146 (45077 Financing activities 417 (238) (3.735) (283) 5,001 1,042 9,058 81.266 (166,402) 14,538 107.447 (343) (11.247) (241) (26) (56.274) (545) (11,247) (241) (291) (12,734) (814) (1,388) (110) (45,977) (26) (56,274) 495 Paymens moe in conceuon with business Squisitions, na (529) Payments for acquisition of property, plant and equipment (12,451) Payments for acquisition of intangible assets (344) Payments for strategic investments, net (395) Other 220 Cash used in investing activities (46,446) Financing activities: Proceeds from issuance of common stock 555 Excess tax benefits from equity awards 627 Payments for taxes related to net share settlement of equity awards (1,874) Payments for dividends and dividend equivalents (12,769) Repurchases of common stock (32,900) Proceeds from issuance of term debt, net 28,662 Repayments of term debt (3,500) Change in commercial paper, net 3,852 Cash used in financing activities (17,347) Increase (decrease) in cash and cash equivalents (195) Cash and cash equivalents, end of the year 20,289 $ Supplemental cash flow disclosure: Cash paid for income taxes, net 11.591 $ Cush paid for interest 2.092 $ See accompanying Notes to Consolidated Financial Statements 543 749 (1.499) (11.561) (35,253) 27.114 407 (1.570) (12,150) (29,722) 24.954 (2,500) (397 (20,483) (636) 20.484 2.191 (17,716 7.276 21.120 S S S 10,444 1.316 13.252 514 $ S Company's products are released soon after technological feasibility has been established and as a result software de- velopment costs were expensed as incurred. Advertising Costs Advertising costs are expensed as incurred and included in selling, general and administrative expenses. Other Income and Expense S millions 2017 2016 2015 Interest and dividend income S5,201 $3,999 $2.921 Interest expense (2.323) (1,456) (733) Other expense, net (133) (1.195) (903) Total other income (expense), net $ 2.745 $ 1.348 $1,285 tailers, value- and education As of Sepi tomers that ir trade receivat September 24 represented 1 accounted for ers accounted September 30 Allowance fo The Company based upon i Appendix A Financial Statement Information le Inc. Notes-continued rical experience, age of the accounts receivable bal- 1. credit quality of the Company's customers, current omic conditions and other factors that may affect the mers' abilities to pay The Company do ble assets with indefin required to be tested sooner if events or the assets may be in tories software that are incurred subsequent to the preliminary project stage. Capitalized costs related to internal-use soft- ware are amortized using the straight-line method over the estimated useful lives of the assets, which range from three to five years. Depreciation and amortization expense on property and equipment was $8.2 billion, $8.3 billion and $9.2 billion during 2017, 2016 and 2015, respectively. The Company's acquired intangible assets with definite useful lives primarily consist of patents and licenses. The following table summarizes the components of acquired intangible asset balances as of September 30, 2017 Amortization expense related to acquired intangible assets was $1.2 billion in 2017 Gross Net Carrying Accumulated Carrying Amount Amortization Amount $ 7.5075 (5.309) S 2,198 Property, Plant and Equipment, Net (5 millions) 2017 2016 Land and buildings $ 13,587 S 10.185 Machinery, equipment and internal-use software. 54.210 44,543 Leasehold improvements 7279 6,517 Gross property, plant and equipment 75,076 61.245 Accumulated depreciation and amortization (41.293) (34,235) Total property, plant and equipment, net $ 33,783 $ 27010 $ millions Definite-lived and amortizable acquired intangible assets Indefinite-lived and non-amortizable acquired intangible assets Total acquired intangible assets 100 S 7.607 S 100 5.309 S 2.298 Long-Lived Assets Including Goodwill and Other Acquired Intangible Assets The Company reviews property, plant and equipment, in- ventory component prepayments and identifiable intangi- bles, excluding goodwill and intangible assets with indefinite useful lives, for impairment. Long-lived assets are reviewed for impairment whenever events or changes in Fair Value Measurements The Company applies fair value accounting for all finan- cial assets and liabilities and non-financial assets and li- abilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be re- ceived from selling an asset or paid to transfer a liability in an orderly transaction between market participants at s available during the periods presented as follows: tical assets rices in ac- Loted prices active mar- be corrobo- ally the full 2017 2016 Dividends Amount Dividends Amount Per Share (in millions) Per Share (in millions) Fourth quarter 0.63 $ 3.252 S 0.57 $ 3,071 Third quarter 0.63 3.281 0.57 3,117 Second quarter 0.57 2.988 0.52 2.879 First quarter 0.57 3,042 0.52 Total cash dividends declared and paid $ 2.40 $ 12,563 S 2.18 S 11.965 2,898 Segment Information and Geographic Data and typically that market bility measure the 7 marketable ices in active The valuation e Company's aments, all of ratings, were el-driven val- n or corrobo- Net sales by product (mil.) iPhone iPad Mac Services Other Products Total net sales 2017 $141,319 19.222 25.850 29.980 12.863 S229.234 2016 S136,700 20.628 22.831 24,348 11.132 5215.639 2015 S155,041 23,227 25.471 19.909 10.067 5233,715 2017 2016 2015 nting require eible financial ir value. The on for any eli- 586.613 596.000 S31684 5.93.864 S 31.186 S28172 Reportable segment (mil.) Americas Ner sales Operating income Europe: Net sales Operating income Greater China: Net sales Operating income Japan : Net sales $54,938 S16,514 $19.952 S 15.348 S 50,337 S 16.527 Company's ac- and 2016 5:44.764 $17.032 5:48.392 S18835 S 38.715 S 23.002 017 -.702 322) 2016 54.780 (4.663) $17.733 S16928 S 15.706 11-06 Services Other Products Total net sales 29.980 12,863 $229,234 24,348 11.132 $215,639 19.909 10,067 $233,715 2017 2016 2015 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 eli- gible financial instruments. Accrued Warranty and Indemnification The following table shows changes in the Company's ac- crued warranties and related costs for 2017 and 2016: 596,600 $30,684 $ 86,613 $28.172 $ 93,864 $ 31,186 $54.938 $16,514 $49.952 $ 15,348 $ 50,337 $ 16,527 Reportable segment (mil.) Americas: Net sales Operating income Europe: Net sales Operating income Greater China: Net sales Operating income Japan: Net sales Operating income Rest of Asia Pacific Net sales Operating income $44,764 $17,032 $ 48,492 $ 18,835 5 58,715 $ 23,002 S millions 2017 Beginning accrued warranty and related costs $ 3.702 Cost of warranty claims (4.322) Accruals for product warranty 4,454 Ending accrued warranty and related costs $ 3,834 2016 5.4.780 (4.663) 3,585 $ 3,702 $17.733 $ 8,097 $ 16,928 $ 7.165 $15.706 $ 7.617 $15,199 55,304 $ 13,654 $ 4,781 $ 15,093 55.518 A reconciliation of the Company's segment operating in- come to the Consolidated Statements of Operations for 2017, 2016 and 2015 is as follows: Term Debt As of September 30, 2017, the Company had outstanding floating and fixed-rate notes with varying maturities for an aggregate principal amount of $104.0 billion (collectively the "Notes"). The Notes are senior unsecured obligations, and interest is payable in arrears. The Company recognized $2.2 billion, $1.4 billion and $722 million of interest expense on its term debt for 2017, 2016 and 2015, respectively. As of September 30, 2017 and September 24, 2016, the fair value of the Company's Notes, based on Level 2 inputs was $106.1 billion and $81.7 billion, respectively, 2017 $77.631 2016 574,301 2015 583,850 S millions Segment operating income Research and development expense Other corporate expenses.net Total operating income (11.581) (4.706) S61.44 (10.0445) (4.232) S60,024 (8,067) (4,553) $71.210