Financial Reporting Problem

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.

Ch 9 Fin Rptg Prob

Name

Chapter 9 Financial Reporting Problem

Section

Date

Apple Inc.

(a)

(b)

(c)

(d)

(e)

531

1/28/2018 University of Phoenix: Financial Accounting: Tools for Business Decision Making

https://phoenix.vitalsource.com/#/books/9781119228301/cfi/6/46!/4/4/18/2@0:48.4 1/7

PRINTED BY: james.a.murray@email.phoenix.edu. Printing is for personal, private use only. No part of this book 
may be reproduced or transmitted without publisher’s prior permission. Violators will be prosecuted.

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 http://investor.apple.com.
2. Select the Financial Information tab.
3. Select the 10‐K annual report dated September 29, 2014.
4. The Notes to Consolidated Financial Statements begin on page 50.

http://investor.apple.com/

1/28/2018 University of Phoenix: Financial Accounting: Tools for Business Decision Making

https://phoenix.vitalsource.com/#/books/9781119228301/cfi/6/46!/4/4/18/2@0:48.4 2/7

1/28/2018 University of Phoenix: Financial Accounting: Tools for Business Decision Making

https://phoenix.vitalsource.com/#/books/9781119228301/cfi/6/46!/4/4/18/2@0:48.4 3/7

1/28/2018 University of Phoenix: Financial Accounting: Tools for Business Decision Making

https://phoenix.vitalsource.com/#/books/9781119228301/cfi/6/46!/4/4/18/2@0:48.4 4/7

PRINTED BY: james.a.murray@email.phoenix.edu. Printing is for personal, private use only. No part of this book 
may be reproduced or transmitted without publisher’s prior permission. Violators will be prosecuted.

1/28/2018 University of Phoenix: Financial Accounting: Tools for Business Decision Making

https://phoenix.vitalsource.com/#/books/9781119228301/cfi/6/46!/4/4/18/2@0:48.4 5/7

PRINTED BY: james.a.murray@email.phoenix.edu. Printing is for personal, private use only. No part of this book 
may be reproduced or transmitted without publisher’s prior permission. Violators will be prosecuted.

1/28/2018 University of Phoenix: Financial Accounting: Tools for Business Decision Making

https://phoenix.vitalsource.com/#/books/9781119228301/cfi/6/46!/4/4/18/2@0:48.4 6/7

PRINTED BY: james.a.murray@email.phoenix.edu. Printing is for personal, private use only. No part of this book 
may be reproduced or transmitted without publisher’s prior permission. Violators will be prosecuted.

1/28/2018 University of Phoenix: Financial Accounting: Tools for Business Decision Making

https://phoenix.vitalsource.com/#/books/9781119228301/cfi/6/46!/4/4/18/2@0:48.4 7/7

PRINTED BY: james.a.murray@email.phoenix.edu. Printing is for personal, private use only. No part of this book 
may be reproduced or transmitted without publisher’s prior permission. Violators will be prosecuted.