The financial statements of Apple, Inc.are presented in Appendix A ofFinancial Accounting. Instructions for accessing and using the company's complete annual report, including the notes to the financial statements, are also provided in Appendix A.

Completea 1,050 word summary of findings and recommendations from the following questions:

• What were the total cost and book value of property, plant, and equipment at September 27, 2014?
• Using the notes to find financial statements, what method or methods of depreciation are used by Apple for financial reporting purposes?
• What was the amount of depreciation and amortization expense for each of the three years 2012-2014? (Hint: Use the statement of cash flows).
• Using the statement of cash flows, what are the amounts of property, plant, and equipment purchased in 2014 and 2013?
• Using the notes to the financial statements, explain in the summary how Apple accounted for its intangible assets in 2014.

• Usethe Week 2 Excelspreadsheet to show your work andsubmitwith your summary.

I have attached the Appendix A and started Excel spreadsheet. Can you please help me get the numbers and explain how they were obtained. They differ from the paper I attached.

Running head: FINANCIAL STATEMENT ANALYSIS Financial Statement Analysis: Apple, Inc. Name of Student Name of Professor Course No. and Title Date Submitted FINANCIAL STATEMENT ANALYSIS Introduction Long lived assets are an integral part of any company to perform its business operations. They include property, plant and equipment, goodwill, leasehold improvements, etc. These assets are useful in increasing the earning capacity of the company. They are shown in the balance sheet under the head long-term or non-current assets. Depreciation on these assets is charged for to decrease in the value due to use or on the basis of time. Some of the long lived assets are amortized or impaired for losses. This paper focuses on the cost and book value of property, plant and equipment and other long lived assets of Apple, Inc. The methods of depreciation used by the company to depreciate its property, plant and equipment as well as the expenditure incurred on their purchase are also discussed. The paper also discusses on accounting for intangible assets by the company. Property, Plant and Equipment Total Cost and Book Value Total cost of property, plant and equipment as of September 27, 2014 was $39,015 million. The cost for the fiscal year ended September 28, 2013 was $28,519 million. It shows that the property, plant and equipment increase by $10,496 million or 36.80% during fiscal year 2014. The cost of land and building was $3,309 million for the fiscal year 2013. It increased by $1,554 million or 46.96% during the fiscal year 2014. The cost of land and building as of September 27, 2014 stood at $4,863. The cost of machinery, equipment and internal-use software were $21,242 million for the fiscal year 2013 which increased by $8,397 million or 39.53% during the fiscal year 2014. Machinery, equipment and internal-use software were $29,639 for the year ended September 27, 2014. The costs of leasehold improvements were $3,968 million during the fiscal year 2014. It increased by $545 million or 13.73% during the fiscal year 2014. FINANCIAL STATEMENT ANALYSIS Leasehold improvements for the fiscal year ended September 27, 2014 amounted to $3,968 million. The increase in land and building was most significant in terms of percentage whereas in terms of dollars the highest growth was seen in Machinery, equipment and internal-use software. The book value of property, plant and equipment as of September 27, 2014 was $20,624 million as compared to $16,597 million during fiscal year 2013. Accumulated depreciation and amortization was $11,922 million during the fiscal year 2013 which increased by $6,469 million or 54.26% and stood at $18,391 million. The book value increased by $4,027 million or 24.26% during fiscal year 2014. It shows an increase in total cost and book value of property, plant and equipment and it means that the company has made considerable investments in property, plant and equipment. Land and buildings Machinery, equipment and internal-use $ 2014 4,863 $ 2013 Change 3,309 $ 1,554 % Change 46.96% software Leasehold improvements Gross property, plant and equipment Accumulated depreciation and 29,639 4,513 39,015 21,242 3,968 28,519 8,397 545 10,496 39.53% 13.73% 36.80% amortization Net property, plant and equipment -18,391 $ 20,624 -11,922 $ 16,597 -6,469 $ 4,027 54.26% 24.26% Method of Depreciation Apple, Inc. computes depreciation by using straight line method over the estimated useful lives of the assets. An estimated useful life of the buildings is lesser of 30 years or remaining life of building. For machinery and equipment the estimated useful life taken is 2 to 5 years and for leasehold improvements the estimated useful life is lesser of lease terms or 10 years. Product tooling and manufacturing process equipment are included in machinery and equipment. The eligible cost of developing or acquiring the software for internal use is capitalized by the FINANCIAL STATEMENT ANALYSIS company. The capitalized cost is of internal use software is amortized by using the straight line method which is taken over the useful life of the asset that typically range from 3 to 5 years. Long lived assets of the company are reviewed for impairment when it is indicted by the circumstances that the carrying amount of the asset is not recoverable. There was no significant impairment recorded by the company during the fiscal year 2014. Goodwill and intangible assets are not amortized but are tested for impairment if it is indicated by circumstances that the asset is to be impaired. Depreciation and Amortization Expense Owing to increase in property, plant and equipment and other assets of the company, the depreciation and amortization expenses have also increased significantly. The depreciation and amortization expense were $3,277 million during the fiscal year 2012. It increased to $6,757 million during the fiscal year 2013 showing a considerable increase of $3,480 million or 106.19%. The expenses for the fiscal year 2014 were $7,946 million which increased by $1,189 million or 17.60%. The increase in depreciation and amortization expenses was due to significant increase in assets of the company. Depreciation and Amortization Expense Depreciation and Amortization Expense 2014 $ 7,946 2013 $ 6,757 2013 Change % Change $ 6,757 $ 1,189 17.60% 2012 Change % Change $ 3,277 $ 3,480 106.19% Purchase of Property, Plant and Equipment The expenditure on purchase of property, plant and equipment was $8,295 million during the fiscal year 2012 which decreased by $130 million or 1.57% during fiscal year 2013. The purchase of property, plant and equipment during fiscal year 2013 was $8,165 million which increased by $1,406 million or 17.22% and stood at $9,571 million. It shows that the company FINANCIAL STATEMENT ANALYSIS incurred less on purchase of property, plant and equipment during fiscal year 2013 whereas the expenditure was higher during fiscal year 2014. 2014 2013 Change % Change Purchase of Plant, Property and Equipment $ 9,571 $ 8,165 $ 1,406 17.22% Accounting For Intangible Assets Goodwill and intangible assets with indefinite useful lives are not amortized but are tested for impairment if it is indicated by circumstances that the asset is to be impaired. These assets are tested for impairment annually or sooner depending on the circumstances if the impairment is needed. The impairment test of goodwill and intangible assets is performed in fourth quarter of each year. Apple, Inc. amortizes the acquired intangible assets with definite useful life over a period that extends from 3 years to 7 years. The company has no impairment charges that are related to goodwill or intangible assets with indefinite useful liver during the fiscal year 2014. References Form 10-K. Apple, Inc. (2014) Retrieved from: https://www.sec.gov/Archives/edgar/data/320193/000119312514383437/d783162d10k.ht FINANCIAL STATEMENT ANALYSIS m#toc783162_11 \f\f\fDUMBO-[JDATED STATEMENTS OF OPERATIONS {h milims. Bump: number Gimmes which are rammed in thmsanjs and per 5139mm Ymm Saptannara? MMDEI'ZE W29. 2014 ' 2:113 ' 2:112 Net sales. 5 152355 5 1m.91u 5 155.505 Ccstufaalas 112.255 105,505 5?.545 Grass margin T055? 54.314 55.552 WWW Research and developlmlt 5.041 4,4?5 5.551 Selling. general mm 11.9.13 10,330 15.045 Total omrlingm 15.054 15.305 13,421 [mum ilmrna 52.505 45.550 55,241 Dll'lar ir'mnan'tmqaema}. r191 $0 1.155 522 I'mbafuna psmismfur'rmmtams 53,433 55,155 55:63 Provision furlr'locu'netaxes 13.9?3 13.1 15 14.03] Net 510131119 5 35.510 5 5?,05? 5 4135.3 lint-gamma: Bait: 5 5.40 5 5.?2 5 5.35 [lite-d 5 5.45 $ 5.55 5 5.51 Sharamaadhmrlting Mmspersl'm: Basic E.EBE.E?2 5.4??3320 5.553.?25 [3mm 5.122.555 5521,4334 5.51?.453 Gashduidasdedamdpermmnmam 5 1.52 5 1.54 5 0.55 mmmmmmmm Financial 3mm GONBIIHJDATHJ STATEMENTS OF 003:1 FREHH'ISNE IHGOIIIE {hmillions} Tea-59mm Sammy'. W20. WED, 20\" 2013 2012 Minna-ma 5 55.510 5 3mm 5 41333 0513mm}: Damminfa'gigncunmtraraan.mtnftaxggctsof550.$55 and $13, mpg-chm [13?] 112! 15 mhmmmmmmm Umgahfalrvaluanfdaimthmmatoftaxbautmamm, 5(351la1cl $23, ream-nd? 1.550 522 [151]: Whmmmmtamdmmnmm mammqugnamm.mmmmmpmm 149 I453: {399} Total change in unrecognized mingling-.595 outlaw-aim immmtax 1.530 54 [550]: mmmmonmm mmmlrualueofmaetaasacuasmatdtbena [901139159] of $155]. $455 air-5511421). media-sly 255 0513 F15 Whrlmmnmtamdmmnam Mdmmh2m$mmr {154} {151) {114} Total Grunge in unrealized 955151505535 an Wmumias, netting: 151 (0221 501 Tmmharmmmnmm] 1.555 [El-Tm 55 Totalca'nu'gha'imim 5 41.\" 5 55.05? 5 41.?59 Smamampa'lyi'lg NEFthtcr Cbnmlidalzad nancial 5131mm. Name Section Date Giomar Picon ACC/291 Chapter 9 Financial Reporting 12/11/2017 (a) $ Land and building Machinery, equipment & internal-use software Leasehold improvements (b) 2014 4,863 $ 29,639 4,513 2013 Change 3,309 $ 1,554 21,242 8,397 3,968 545 The depreciation method used by Apple, Inc for financial reporting purposes it the straight line method (c) $ 2014 7,946 $ 2013 6,757 $ Purchase of Plant, Property and Equipmen $ 2014 9,571 $ 2013 8,165 Depreciation and Amortization expense 2012 3,277 (d) (e) Goodwill and intagible assets with indefinite useful lives are not amortized but are tested for impairment if it indicated by circumstances that the asset is to be impaired. These assets are tested for impairment annuall sooner depending on the circumstances if the impariment is needed. The impairment test of goodwill and intagible assets is performed in the 4th quarter of each year. Apple, Inc. amortizes the acquired intagible as with definite useful life over a period that extends from 3 years to 7 years. The company has no impairment charges that are related to goodwill or intangible assets with indefinite useful lives during the fiscal year 201 531 531 Chapter 9 Financial Reporting Problem Apple Inc. % Change 46.96% 39.53% 13.73% ses it the straight line method d but are tested for impairment if it is s are tested for impairment annually or e impairment test of goodwill and amortizes the acquired intagible assets . The company has no impairment eful lives during the fiscal year 2014. 531 531