Refer to Apple Inc.s consolidated financial statements in Appendix A and online in the filings section of

Question:

Refer to Apple Inc.’s consolidated financial statements in Appendix A and online in the filings section of www.sec.gov.

Requirements

1. Using the Revenue Recognition section of Note 1 as a reference, describe how Apple Inc., recognizes revenue. From what types of activities does Apple earn its revenue?

2. The third account listed on Apple’s Consolidated Balance Sheet is called “Accounts receivable, less allowances.” To what does the “allowances” refer?

3. Refer to the Accounts Receivable section of Note 2. What kinds of accounts receivable are included in Apple Inc.’s receivables?

4. How much is the allowance for uncollectible accounts in 2016 and 2015?

5. Calculate the current ratio, quick (acid-test) ratio, and net working capital for Apple Inc., for 2016 and 2015. Evaluate Apple Inc.’s liquidity trend over the two years. What other information might be helpful in evaluating these statistics?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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