Financial Reporting Problem, Apple Inc, accounting homework help


Question Description

Purpose of Assignment

The purpose of this assignment is to help you understand the basics of financial statement analysis related to the assets section of the balance sheet, data interpretation, and how financial information is obtained to understand how a company accounts for its long-lived assets.

Assignment Steps

Resources: Financial Accounting: Tools for Business Decision Making

Note: The financial statements of Apple, Inc. are presented in Appendix A of Financial 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.

Complete a 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.

Use the Week 2 Excel® spreadsheet to show your work and submit with your summary.

Unformatted Attachment Preview

Name Section Date Chapter 9 Financial Reporting Problem Apple Inc. (a) (b) (c) (d) (e) 531 Specimen Financial Statements: Apple Inc. Once each year, a corporation communicates to its stockholders and other interested parties by issuing a complete set of audited financial statements. The annual report, as this communication is called, summarizes the financial results of the company's operations for the year and its plans for the future. Many annual reports are attractive, multicolored, glossy public relations pieces, containing pictures of corporate officers and directors as well as photos and descriptions of new products and new buildings. Yet the basic function of every annual report is to report financial information, almost all of which is a product of the corporation's accounting system. The content and organization of corporate annual reports have become fairly standardized. Excluding the public relations part of the report (pictures, products, etc.), the following are the traditional financial portions of the annual report: Financial Highlights Letter to the Stockholders Management's Discussion and Analysis Financial Statements Notes to the Financial Statements Management's Responsibility for Financial Reporting Management's Report on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm Selected Financial Data The official SEC filing of the annual report is called a Form 10‐K, which often omits the public relations pieces found in most standard annual reports. On the following pages, we present Apple Inc.'s financial statements taken from the company's 2014 Form 10‐K. To access Apple's Form 10‐K, including notes to the financial statements, follow these steps: 1. Go to 2. 3. 4. Select the Financial Information tab. Select the 10‐K annual report dated September 29, 2014. The Notes to Consolidated Financial Statements begin on page 50. ...
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Financial Statements Analysis of Apple Inc.
Student’s Name




Plant, Property and Equipment
Plant, property, and equipment, are the tangible fixed assets of the company. These
assets are physical in nature and it is expected that economic benefit will be derived from these
assets for a period that is longer than one year. Lease-hold improvements, machinery and
equipment, land and buildings, motor vehicles, etc. are some of the few examples of, plant,
equipment, and property. Goodwill is considered an intangible asset as it is not physical and
tangible in nature. Property, plant and equipment are revealed in assets non-current assets section
of the balance sheet. Since the benefit from plant, equipment, and property is derived for a period
of more than one year so the decline in their value is charged to revenue. These assets are
depreciated every year except land as the value of land appreciates in relation to time. The
amount of depreciation is accumulated and is deducted from the original cost of the asset at the
time of making presentation in the balance sheet. This value is known as book value and the
property, plant and equipment appear at this value in the financial statements (Apple Inc., 2014).
Total Cost and Book Value
The total cost of tangible assets is the cost for which these assets are bought or are
purchased. It is also called historic cost as it is the cost of purchasing the assets. The company’s
tangible assets are recorded as: land and buildings for $4,863 million, machinery, equipment and
internal use software for $29,6...

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