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.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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.
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.
Go to http://investor.apple.com.
Select the Financial Information tab.
Select the 10‐K annual report dated September 29, 2014.
The Notes to Consolidated Financial Statements begin on page 50.
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