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 2019, 2018, and 2017, identify the amount of cash provided by operating activities and cash paid for dividends. 3. In 2019, did Apple have sufficient cash flows from operations to pay dividends? 4. Did Apple spend more or less cash to repurchase common stock in 2019 versus 2018? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 For each fiscal year 2019, 2018, and 2017, identify the amount of cash provided by operating activities and cash paid for dividends. (Enter your answers in millions of dollars.) $ millions 2019 2018 2017 Cash provided by operating activities Cash dividends paid $ 63,598 $ 12,769 65,824 $ 12,150 X 81,266 X 11,561 < Required 1 Required 3 > Current assets Apple Inc. CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands and par value) Cash and cash equivalents Marketable securities Accounts receivable, net Inventories Vendor non-trade receivables Other current assets Total current assets Non-current assets 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 ASSETS September 28, 2019 September 29, 2018 $ 48,844 25,913 51,713 40,388 22,926 23,186 4,106 3,956 22,878 25,809 12,352 12,087 162,819 131,339 LIABILITIES AND SHAREHOLDERS' EQUITY 105,341 170,799 37,378 41,304 32,978 22,283 175,697 234,386 338,516 $ 365,725 $ 46,236 $ 55,888 37,720 33,327 5,522 5,966 5,980 11,964 10,260 8,784 105,718 115,929 Term debt Other non-current liabilities Total non-current liabilities Total liabilities 91,807 93,735 50,503 48,914 142,310 142,649 248,028 258,578 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 45,174 40,201 Retained earnings 45,898 70,400 Accumulated other comprehensive income (loss) (584) (3,454) Total shareholders' equity 90,488 107,147 Total liabilities and shareholders' equity 338,516 $ 365,725 See accompanying Notes to Consolidated Financial Statements. Years ended Net sales: Products Services Total net sales Cost of sales: Products Apple Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts) September 29, 2018 September 30, 2017 Services Total cost of sales Gross margin Operating expenses: Research and development Selling, general and administrative Total operating expenses Operating income Other income (expense), net Income before provision for income taxes Provision for income taxes September 28, 2019 213,883 46,291 260,174 225,847 39,748 265,595 196,534 32,700 229,234 144,996 148,164 126,337 16,786 15,592 14,711 161,782 163,756 141,048 98,392 101,839 88,186 16,217 14,236 11,581 18,245 16,705 15,261 34,462 30,941 26,842 63,930 70,898 61,344 1,807 2,005 2,745 65,737 72,903 64,089 10,481 13,372 15,738 55,256 59,531 48,351 Net income Earnings per share: Basic $ 11.97 $ 12.01 $ 9.27 Diluted $ 11.89 $ 11.91 $ 9.21 Shares used in computing earnings per share: Basic Diluted 4,617,834 4,648,913 4,955,377 5,000,109 5,217,242 5,251,692 Years ended Net income See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) 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 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 Adjustment for net (gains) losses realized and included in net income Total change in unrealized gains/losses on marketable securities 23 382 (1,477) (638) 905 (162) 3,802 (3,407) (782) 25 (64) 3,827 (3,406) (846) Total other comprehensive income (loss) 2,781 (3,026) (784) Total comprehensive income 58,037 $ 56,505 $ 47,567 See accompanying Notes to Consolidated Financial Statements. Apple Inc. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions) September 28, 2019 Years ended Total shareholders' equity, beginning balances $ 107,147 Common stock and additional paid-in capital Beginning balances Common stock issued 40,201 781 $ September 29, 2018 134,047 $ 35,867 669 September 30, 2017 128,249 31,251 555 Common stock withheld related to net share settlement of equity awards (2,002) (1,778) (1,468) Share-based compensation 6,194 5,443 4,909 Tax benefit from equity awards, including transfer pricing adjustments 620 45,174 40,201 35,867 Ending balances Retained earnings Beginning balances 70,400 98,330 96,364 Net income 55,256 59,531 48,351 Dividends and dividend equivalents declared (14,129) (13,735) (12,803) Common stock withheld related to net share settlement of equity awards (1,029) (948) (581) Common stock repurchased (67,101) (73,056) (33,001) Cumulative effects of changes in accounting principles 2,501 278 Ending balances 45,898 70,400 98,330 Accumulated other comprehensive income (loss) Beginning balances Other comprehensive income (loss) (3,454) 2,781 (150) (3,026) 634 (784) Cumulative effects of changes in accounting principles 89 Ending balances (584) (278) (3,454) (150) Total shareholders' equity, ending balances 90,488 $ 107,147 $ 134,047 See accompanying Notes to Consolidated Financial Statements