Review the Financial Statements for Apple, Inc.

What type of cost accounting system would be best suited to this type of business (job order or process costing) and why?

September 28, 2013 10,746 37,037 6,757 2,253 1,141 Apple Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Years ended September 26, 2015 September 27, 2014 Cash and cash equivalents, beginning of the year 13,844 14,259 Operating activities: Net income 53,394 39,510 Adjustments to reconcile net income to cash generated by operating activities: Depreciation and amortization 11,257 7,946 Share-based compensation expense 3,586 2,863 Deferred income tax expense 1,382 2,347 Changes in operating assets and liabilities: Accounts receivable, net 611 (4,232) Inventories (238) (76) Vendor non-trade receivables (3,735) (2,220) Other current and non-current assets (179) 167 Accounts payable 5,400 Deferred revenue 1,042 1,460 Other current and non-current liabilities 8,746 6,010 Cash generated by operating activities 81,266 59,713 Investing activities: Purchases of marketable securities (166,402) (217,128) Proceeds from maturities of marketable securities 14,538 18,810 Proceeds from sales of marketable securities 107,447 189,301 Payments made in connection with business acquisitions, net (343) (3,765) Payments for acquisition of property, plant and equipment (11,247) (9,571) Payments for acquisition of intangible assets (241) (242) Other (26) Cash used in investing activities (56,274) (22,579) Financing activities: Proceeds from issuance of common stock 543 Excess tax benefits from equity awards 749 Taxes paid related to net share settlement of equity awards (1,499) (1,158) Dividends and dividend equivalents paid (11,561) (11,126) Repurchase of common stock (35,253) (45,000) Proceeds from issuance of term debt, net 27,114 11,960 Change in commercial paper, net 2.191 6,306 Cash used in financing activities (17,716) (37,549) (415) 7,276 Increase (decrease) in cash and cash equivalents Cash and cash equivalents, end of the year 21,120 13,844 (2,172) (973) 223 1,080 2,340 1,459 4,521 53,666 5,938 (148,489) 20,317 104,130 (496) (8,165) (911) (160) (33,774) 730 530 739 701 (1,082) (10,564) (22,860) 16,896 (16,379) 3,513 14,259 Supplemental cash flow disclosure: Cash paid for income taxes, net Cash paid for interest 13,252 514 $ $ 10,026 S 3395 9,128 0 See accompanying Notes to Consolidated Financial Statements. Appendix A Financial Statement Information September 27, 2014 $ Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) September 26, 2015 ASSETS Current assets Cash and cash equivalents 21,120 Short-term marketable securities 20,481 Accounts receivable, less allowances of $82 and $86, respectively 16,849 Inventories 2,349 Deferred tax assets 5,546 Vendor non-trade receivables 13,494 Other current assets 9,539 Total current assets 89,378 Long-term marketable securities 164,065 22,471 Property, plant and equipment, net 5,116 Goodwill Acquired intangible assets, net 3,893 5,556 Other assets 290,479 Total assets 13,844 11,233 17,460 2,111 4,318 9,759 9,806 68,531 130,162 20,624 4,616 4,142 3,764 231,839 30,196 18,453 8,491 6,308 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable Accrued expenses Deferred revenue Commercial paper Current portion of long-term debt Total current liabilities Deferred revenue - non-current Long-term debt Other non-current liabilities Total liabilities Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, S0.00001 par value: 12,600,000 shares authorized; 5,578,753 and 5,866,161 shares issued and outstanding, respectively Retained earnings Accumulated other comprehensive income Total shareholders' equity Total liabilities and shareholders' equity See accompanying Notes to Consolidated Financial Statements. 35,490 25,181 8,940 8,499 2,500 80,610 3,624 53,463 33,427 171,124 63,448 3,031 28,987 24,826 120,292 27,416 92,284 (345) 119,355 290,479 23,313 87,152 1,082 111,547 231,839 A-4 Appendix A Financial Statement Information Total Shareholders Equity 118,210 37,037 (970) (10,676) (22,950) 2,253 (587) (471) Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except number of shares which are reflected in thousands) Accumulated Other Common Stock and Comprehensive Additional Paid-In Capital Retained Income Shares Amount Earnings (Loss) Balances as of September 29, 2012 6,574,458 S 16,422 101.289 $ 499 $ Net income 37,037 Other comprehensive income (loss) (970) Dividends and dividend equivalents declared 0 (10,676) Repurchase of common stock (328,837) (22,950) Share-based compensation 2,253 Comman stock issued, net of shares withheld for employee taxes 48,873 (143) (444) Tax benefit from equity awards, including transfer pricing adjustments 1.232 Balances as of September 28, 2013 6,294,494 19,764 104,256 Net income 0 39,510 Other comprehensive income (loss) 1,553 Dividends and dividend equivalents declared (11,215) Repurchase of common stock (488,677) 0 (45,000) Share-based compensation 2,863 Common stock issued, net of shares withheld for employee taxes 60,344 (49) (399) Tax benefit from equity awards, including transfer pricing adjustments 735 0 Balances as of September 27, 2014 5,866,161 23,313 87,152 Net income 53.394 Other comprehensive income (loss) Dividends and dividend equivalents declared (11,627) Repurchase of common stock (325,032) (36,026) Share-based compensation 3,586 Common stock issued, net of shares withheld for employee taxes 37,624 (231) (609) Tax benefit from equity awards, including transfer pricing adjustments 5,578,753 Balances as of September 26, 2015 27,416 92,284 $ (345) $ See accompanying Notes to Consolidated Financial Statements. 0 0 1,232 123,549 39,510 1,553 (11,215) (45,000) 2,863 (448) 735 111,547 53,394 (1,427) (11,627) (36,026) 3,586 (840) 748 748 119,355 Appendix A Financial Statement Information A-3 APPLE September 28, 2013 170,910 106,606 64,304 4,475 10,830 15,305 48,999 1,156 50,155 13.118 37,037 080 Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) Years ended September 26, 2015 September 27, 2014 Net sales 233,715 182,795 Cost of sales 140,089 112,258 Gross margin 93,626 70,537 Operating expenses Research and development 8,067 6,041 Selling, general and administrative 14,329 11,993 Total operating expenses 22,396 18,034 Operating income 71.230 52,503 Other income, net 1,285 Income before provision for income taxes 72,515 53,483 Provision for income taxes 19.121 13,973 Net income 53,394 39,510 Earnings per share: Basic 9.28 6.49 Diluted 9.22 6.45 Shares used in computing earnings per share: Basic 5,753,421 6,085,572 Diluted 5,793,069 6,122,663 Cash dividends declared per common share $ 1.98 1.82 See accompanying Notes to Consolidated Financial Statements. 5.72 5.68 6.477,320 6,521.634 1.64 September 28, 2013 $ 37,037 (112) 522 (458) Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Years ended September 26, 2015 September 27, 2014 Net income $ 53,394 S 39,510 Other comprehensive income (loss): Change in foreign currency translation, net of tax effects of $201, S50 and $35, respectively (411) (137) Change in unrealized gains/losses ori derivative instruments: Change in fair value of derivatives, net of tax benefit (expense) of S(441), S(297) and (351), respectively 2,905 1,390 Adjustment for net losses (gains) realized and included in net income net of tax expense (benefit) of $630, $(36) and $255, respectively (3,497 149 Total change in unrecognized yains/losses on derivative instruments, net of tax (592) 1,539 Change in unrealized gains/losses on marketable securities: Change in fair value of marketable securities, net of tax benefit (expense) of $264, S(153) and S458, respectively (483) 285 Adjustment for net (gains) losses realized and included in net income, net of tax expense (benefit of $(32), S71 and $82, respectively 59 (134) Total change in unrealized guins/losses on marketable securities, net of tax (424) Total other comprehensive income (loss) (1,427) 1,553 Total comprehensive income 51,967 41,063 See accompanying Notes to Consolidated Financial Statements. (791) (131) 151 (922) (970) 36,067