The financial statements of Apple Inc. are presented in Appendix A. Instructions for accessing and using the company’s complete annual report, including the notes to the financial statements are also provided in Appendix A.
Apple’s financial statements contain the following selected accounts, stated in millions of dollars.
Accounts Payable ........ Cash and Cash Equivalents
Accounts Receivable ...... Research and Development Expense
Property, Plant, and Equipment .. Inventories
(a) Answer the following questions.
(1) What is the increase and decrease side for each account?
(2) What is the normal balance for each account?
(b) Identify the probable other account in the transaction and the effect on that account when:
(1) Accounts Receivable is decreased.
(2) Accounts Payable is decreased.
(3) Inventories are increased.
(c) Identify the other account(s) that ordinarily would be involved when:
(1) Research and Development Expense is increased.
(2) Property, Plant, and Equipment is increased.