Refer to Apple's financial statements in Appendix A to answer the following. 1. What percent of the original cost of Apple's Property, Plant and Equipment account remains to be depreciated as of (a) September 28, 2019, and (b) September 29, 2018? Assume these assets have no salvage value and the entire account is depreciable. Hint: Accumulated Depreciation is listed under "Property, Plant and Equipment" in the notes to Apple's financial statements in Appendix A. 2. Much research and development are needed to create the next iPhone. Do companies capitalize and amortize research and development costs over the life of the product, or are research and development costs expensed as incurred? 3. Compute Apple's total asset turnover for the year ended (a) September 28, 2019, and (b) September 29, 2018. Total assets at September 30, 2017, are $375,319 ($ millions). 4. Using the results in part 3, is the change in Apple's asset turnover favorable or unfavorable? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What percent of the original cost of Apple's Property, Plant and Equipment account remains to be depreciated as of (a) September 28, 2019, and (b) September 29, 2018? Assume these assets have no salvage value and the entire account is depreciable. Hint: Accumulated Depreciation is listed under "Property, Plant and Equipment" in the notes to Apple's financial statements in Appendix A. (Round your answers to 1 decimal place.) Show less % of Original Cost (a) September 28, 2019 % (b) September 29, 2018 % Required 1 Required 2 Required 3 Required 4 Compute Apple's total asset turnover for the year ended (a) September 28, 2019, and (b) September 29, 2018. Total assets at September 30, 2017, are $375,319 ($ millions). (Round your answers to 2 decimal places.) Total Asset Turnover (a) September 28, 2019 times (b) September 29, 2018 times Current assets Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets Non-current assets Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 28, 2019 ASSETS 48,844 51,713 22,926 4,106 22,878 12,352 162,819 105,341 37,378 32,978 175,697 338,516 LIABILITIES AND SHAREHOLDERS' EQUITY 46,236 37,720 5,522 5,980 10,260 105,718 91,807 50,503 142,310 248,028 45,174 45,898 (584) Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets Current liabilities Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities Non-current liabilities Term debt Other non-current liabilities Total non-current liabilities Total liabilities Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,443,236 and 4,754,986 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. 90,488 338,516 September 29, 2018 25,913 40,388 23,186 3,956 25,809 12,087 131,339 170,799 41,304 22,283 234,386 365,725 55,888 33,327 5,966 11,964 8,784 115,929 93,735 48,914 142,649 258,578 40,201 70,400 (3,454) $ $ $ 107,147 365,725 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended Cash, cash equivalents and restricted cash, beginning balances Operating activities Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense (benefit) Other Changes in operating assets and liabilities: Accounts receivable, net Inventories Vendor non-trade receivables Other current and non-current assets Accounts payable Deferred revenue Other current and non-current liabilities Cash generated by operating activities Investing activities Purchases of marketable securities Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments for acquisition of property, plant and equipment Payments made in connection with business acquisitions, net Purchases of non-marketable securities Proceeds from non-marketable securities Other Cash generated by (used in) investing activities Financing activities Proceeds from issuance of common stock Payments for taxes related to net share settlement of equity awards Payments for dividends and dividend equivalents Repurchases of common stock Proceeds from issuance of term debt, net Repayments of term debt Proceeds from (Repayments of) commercial paper, net Other Cash used in financing activities Increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, ending balances Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest September 28, 2019 September 29, 2018 September 30, 2017 25,913 20,289 20,484 55,256 59,531 48,351 12,547 10,903 10,157 6,068 5,340 4,840 (32,590) 5,966 (444) (5,322) 828 (8,010) (423) (340) (652) 245 (289) 2,931 873 (1,923) (625) (4,700) 69,391 (39,630) 40,102 56,988 (10,495) (624) (1,001) 1,634 (1,078) 45,896 781 (2,817) (14,119) (66,897) 6,963 (8,805) (5,977) (105) (90,976) 24,311 50,224 15,263 $ 3,423 $ 9,175 (3) 38,449 77,434 (71,356) 55,881 47,838 (13,313) (721) (1,871) 353 (745) 16,066 669 (2,527) (13,712) (72,738) 6,969 (6,500) (37) (87,876) 5,624 25,913 $ 10,417 $ 3,022 $ (166) (2,093) (2,723) (4,254) (5,318) 8,966 (593) 1,092 64,225 (159,486) 31,775 94,564 (12,451) (329) (521) 126 (124) (46,446) 555 (1,874) (12,769) (32,900) 28,662 (3,500) 3,852 (17,974) (195) 20,289 11,591 2,092 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) September 28, 2019 September 29, 2018 September 30, 2017 213,883 225,847 196,534 46,291 39,748 32,700 Total net sales 260,174 265,595 229,234 144,996 148,164 126,337 16,786 15,592 14,711 Total cost of sales 161,782 163,756 141,048 Gross margin 98,392 101,839 88,186 Research and development 16,217 14,236 11,581 Selling, general and administrative 18,245 16,705 15,261 Total operating expenses 34,462 30,941 26,842 Operating income 63,930 70,898 61,344 Other income (expense), net 1,807 2,005 2,745 Income before provision for income taxes 65,737 72,903 64,089 Provision for income taxes 10,481 13,372 15,738 Net income 55,256 59,531 48,351 Earnings per share: Basic 11.97 12.01 9.27 Diluted 11.89 11.91 9.21 Shares used in computing earnings per share: 4,617,834 4,955,377 5,217,242 Basic Diluted 4,648,913 5,000,109 5,251,692 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended Net income September 28, 2019 September 29, 2018 September 30, 2017 55,256 $ $ 59,531 $ 48,351 Other comprehensive income (loss): Change in foreign currency translation, net of tax (408) (525) 224 Change in unrealized gains/losses on derivative instruments, net of tax: Change in fair value of derivatives (661) 523 1,315 23 382 (1,477) (638) 905 (162) Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on derivative instruments Change in unrealized gains/losses on marketable securities, net of tax: Change in fair value of marketable securities 3,802 (3,407) (782) 25 (64) Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on marketable securities Total other comprehensive income (loss) 3,827 (3,406) (846) 2,781 (3,026) (784) Years ended Net sales: Products Services Cost of sales: Products Services Operating expenses: $ Refer to Apple's financial statements in Appendix A to answer the following. 1. What percent of the original cost of Apple's Property, Plant and Equipment account remains to be depreciated as of (a) September 28, 2019, and (b) September 29, 2018? Assume these assets have no salvage value and the entire account is depreciable. Hint: Accumulated Depreciation is listed under "Property, Plant and Equipment" in the notes to Apple's financial statements in Appendix A. 2. Much research and development are needed to create the next iPhone. Do companies capitalize and amortize research and development costs over the life of the product, or are research and development costs expensed as incurred? 3. Compute Apple's total asset turnover for the year ended (a) September 28, 2019, and (b) September 29, 2018. Total assets at September 30, 2017, are $375,319 ($ millions). 4. Using the results in part 3, is the change in Apple's asset turnover favorable or unfavorable? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What percent of the original cost of Apple's Property, Plant and Equipment account remains to be depreciated as of (a) September 28, 2019, and (b) September 29, 2018? Assume these assets have no salvage value and the entire account is depreciable. Hint: Accumulated Depreciation is listed under "Property, Plant and Equipment" in the notes to Apple's financial statements in Appendix A. (Round your answers to 1 decimal place.) Show less % of Original Cost (a) September 28, 2019 % (b) September 29, 2018 % Required 1 Required 2 Required 3 Required 4 Compute Apple's total asset turnover for the year ended (a) September 28, 2019, and (b) September 29, 2018. Total assets at September 30, 2017, are $375,319 ($ millions). (Round your answers to 2 decimal places.) Total Asset Turnover (a) September 28, 2019 times (b) September 29, 2018 times Current assets Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets Non-current assets Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 28, 2019 ASSETS 48,844 51,713 22,926 4,106 22,878 12,352 162,819 105,341 37,378 32,978 175,697 338,516 LIABILITIES AND SHAREHOLDERS' EQUITY 46,236 37,720 5,522 5,980 10,260 105,718 91,807 50,503 142,310 248,028 45,174 45,898 (584) Marketable securities Property, plant and equipment, net Other non-current assets Total non-current assets Total assets Current liabilities Accounts payable Other current liabilities Deferred revenue Commercial paper Term debt Total current liabilities Non-current liabilities Term debt Other non-current liabilities Total non-current liabilities Total liabilities Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, $0.00001 par value: 12,600,000 shares authorized; 4,443,236 and 4,754,986 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. 90,488 338,516 September 29, 2018 25,913 40,388 23,186 3,956 25,809 12,087 131,339 170,799 41,304 22,283 234,386 365,725 55,888 33,327 5,966 11,964 8,784 115,929 93,735 48,914 142,649 258,578 40,201 70,400 (3,454) $ $ $ 107,147 365,725 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended Cash, cash equivalents and restricted cash, beginning balances Operating activities Net income Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization Share-based compensation expense Deferred income tax expense (benefit) Other Changes in operating assets and liabilities: Accounts receivable, net Inventories Vendor non-trade receivables Other current and non-current assets Accounts payable Deferred revenue Other current and non-current liabilities Cash generated by operating activities Investing activities Purchases of marketable securities Proceeds from maturities of marketable securities Proceeds from sales of marketable securities Payments for acquisition of property, plant and equipment Payments made in connection with business acquisitions, net Purchases of non-marketable securities Proceeds from non-marketable securities Other Cash generated by (used in) investing activities Financing activities Proceeds from issuance of common stock Payments for taxes related to net share settlement of equity awards Payments for dividends and dividend equivalents Repurchases of common stock Proceeds from issuance of term debt, net Repayments of term debt Proceeds from (Repayments of) commercial paper, net Other Cash used in financing activities Increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, ending balances Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest September 28, 2019 September 29, 2018 September 30, 2017 25,913 20,289 20,484 55,256 59,531 48,351 12,547 10,903 10,157 6,068 5,340 4,840 (32,590) 5,966 (444) (5,322) 828 (8,010) (423) (340) (652) 245 (289) 2,931 873 (1,923) (625) (4,700) 69,391 (39,630) 40,102 56,988 (10,495) (624) (1,001) 1,634 (1,078) 45,896 781 (2,817) (14,119) (66,897) 6,963 (8,805) (5,977) (105) (90,976) 24,311 50,224 15,263 $ 3,423 $ 9,175 (3) 38,449 77,434 (71,356) 55,881 47,838 (13,313) (721) (1,871) 353 (745) 16,066 669 (2,527) (13,712) (72,738) 6,969 (6,500) (37) (87,876) 5,624 25,913 $ 10,417 $ 3,022 $ (166) (2,093) (2,723) (4,254) (5,318) 8,966 (593) 1,092 64,225 (159,486) 31,775 94,564 (12,451) (329) (521) 126 (124) (46,446) 555 (1,874) (12,769) (32,900) 28,662 (3,500) 3,852 (17,974) (195) 20,289 11,591 2,092 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) September 28, 2019 September 29, 2018 September 30, 2017 213,883 225,847 196,534 46,291 39,748 32,700 Total net sales 260,174 265,595 229,234 144,996 148,164 126,337 16,786 15,592 14,711 Total cost of sales 161,782 163,756 141,048 Gross margin 98,392 101,839 88,186 Research and development 16,217 14,236 11,581 Selling, general and administrative 18,245 16,705 15,261 Total operating expenses 34,462 30,941 26,842 Operating income 63,930 70,898 61,344 Other income (expense), net 1,807 2,005 2,745 Income before provision for income taxes 65,737 72,903 64,089 Provision for income taxes 10,481 13,372 15,738 Net income 55,256 59,531 48,351 Earnings per share: Basic 11.97 12.01 9.27 Diluted 11.89 11.91 9.21 Shares used in computing earnings per share: 4,617,834 4,955,377 5,217,242 Basic Diluted 4,648,913 5,000,109 5,251,692 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended Net income September 28, 2019 September 29, 2018 September 30, 2017 55,256 $ $ 59,531 $ 48,351 Other comprehensive income (loss): Change in foreign currency translation, net of tax (408) (525) 224 Change in unrealized gains/losses on derivative instruments, net of tax: Change in fair value of derivatives (661) 523 1,315 23 382 (1,477) (638) 905 (162) Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on derivative instruments Change in unrealized gains/losses on marketable securities, net of tax: Change in fair value of marketable securities 3,802 (3,407) (782) 25 (64) Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on marketable securities Total other comprehensive income (loss) 3,827 (3,406) (846) 2,781 (3,026) (784) Years ended Net sales: Products Services Cost of sales: Products Services Operating expenses: $