Refer to Apple Inc.’s Consolidated Financial Statements in Appendix A

Refer to Apple Inc.’s Consolidated Financial Statements in Appendix A and online in the filings section of www.sec.gov, and answer the following questions:


Requirements

1. Refer to Note 1 and Note 3 of the Notes to Consolidated Financial Statements. What kinds of assets are included in the Property, Plant and Equipment of Apple Inc.?

2. Refer to Note 1, Property, Plant and Equipment section. Which depreciation method does Apple use for reporting to stockholders and creditors in the financial statements? What type of depreciation method does the company probably use for income tax purposes? Why is this method preferable for tax purposes?

3. Depreciation expense is embedded in operating expense accounts listed on the income statement, so you can’t break out the actual figure for depreciation in that way. Refer to the section on Property, Plant and Equipment in Note 1. How much was Apple’s depreciation and amortization expense on plant assets during 2016? What did this figure include? Now refer to Note 3—Consolidated Financial Statement Details. How much was Apple’s accumulated depreciation on fixed assets at the end of 2016? Explain why accumulated depreciation exceeds depreciation expense for the current year.

4. Refer to Notes 1 and 4 of the Notes to Consolidated Financial Statements. What are Apple’s intangible assets? How does the company account for each of these intangibles over its lifetime?