Ocean Carrier Essay

1352 Words Oct 18th, 2013 6 Pages
2. Suppose a customer buys an iPhone from Apple for $500 on January 1, 2010. The cost of the iPhone to Apple is $350. Assume that the customer is entitled to upgrades over the next two years. Use the following financial statement effects template (FSET) to illustrate the financial statement impacts for Apple of the customer's iPhone purchase on the date of the initial purchase and at the end of each of the two years following the initial purchase under generally accepted accounting principles (GAAP).

GAAP | Assets | = | Liabilities | + | Owners' Equity | | Revenues | Expenses | Net Income | January 1, 2010: | | | | | | | | | | Deliver iPhone to the customer | +500 (Cash) | | +500 (Deferred Revenue) | | | | | | |
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Based on your answers to questions 2 and 3, describe how Apple's balance sheet and income statement would differ if it used its preferred approach rather than U.S. GAAP. In particular, which line item on each statement would be affected, and in what direction? * On Income Statement for December 31, 2010, the number of Revenues, Cost of Goods Sold, Expenses and Net Income will go up if we use the Non-GAAP approach. * On Income Statement for December 31, 2011, the number of Revenues, Cost of Goods Sold, Expenses and Net Income will go

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