ACCT1101 Introduction to Financial Accounting
Assignment and Discussion Questions – Suggested Solution to Chapter 2
Assignment and Discussion Questions - Suggested Solution
(P2-5)
P2–5. (dollars in millions)
Req. 1
a. Cash (+A)............................................................................ 18,266
Long-term debt (+L) ..................................................... 18,266
b. Long-term investments (+A)................................................ 4,200
Short-term investments (+A) .............................................. 16,800
Cash (−A) .................................................................... 21,000
c. Property, plant, and equipment (+A) ................................... 10,981
Cash (−A) .................................................................... 9,571
Short-term debt (+L) .................................................... 1,410
d. Cash (+A)............................................................................ 1,469
Common stock (+SE) .................................................. 1
Additional paid-in capital (+SE) ................................... 1,468
e. Cash (+A)............................................................................ 18,810
Short-term investments (−A) ........................................ 18,810
f. Retained earnings (−SE) ..................................................... 11,126
Dividends payable (+L) ................................................ 11,126
ACCT1101 Introduction to Financial Accounting
Assignment and Discussion Questions – Suggested Solution to Chapter 2
P2–5. (continued)
Req. 2
Short-Term
Cash Investments Accounts Receivable
Beg. 48,844 Beg. 51,713 Beg. 22,926
(a) 18,266 21,000 (b) (b) 16,800 18,810 (e)
(d) 1,469 9,571 (c) 49,703 22,926
(e) 18,810
56,818
Inventories Other Current Assets
Beg. 4,106 Beg. 35,230
4,106 35,230
Long-Term Property, Plant, and Other
Investments Equipment Noncurrent Assets
Beg. 105,341 Beg. 37,378 Beg. 32,978
(b) 4,200 (c) 10,981
109,541 48,359 32,978
Accounts Accrued Unearned
Payable Expenses Revenue
46,236 Beg. 43,700 Beg. 5,522 Beg.
46,236 43,700 5,522
Dividends
Short-term Debt Payable
10,260 0 Beg.
1,410 (c) 11,126 (f)
11,670 11,126
Other
Long-term Debt Noncurrent Liabilities
91,807 Beg. 50,503 Beg.
18,266 (a)
110,073 50,503
Common Additional Retained
Stock Paid-in Capital Earnings
1 Beg 45,173 Beg. 45,314 Beg.
1 (d) 1,468 (d) (f) 11,126
2 46,641 34,188
ACCT1101 Introduction to Financial Accounting
Assignment and Discussion Questions – Suggested Solution to Chapter 2
P2–5. (continued)
Req. 3
Apple Inc.
Trial Balance
At September 26, 2020
(in millions)
Debit Credit
Cash 56,818
Short-term Investments 49,703
Accounts receivable 22,926
Inventories 4,106
Other current assets 35,230
Long-term investments 109,541
Property, plant, and equipment 48,359
Other noncurrent assets 32,978
Accounts payable 46,236
Accrued expenses 43,700
Unearned revenue 5,522
Dividends payable 11,126
Short-term debt 11,670
Long-term debt 110,073
Other noncurrent liabilities 50,503
Common stock 2
Additional paid-in capital 46,641
Retained earnings 34,188
Totals 359,661 359,661
ACCT1101 Introduction to Financial Accounting
Assignment and Discussion Questions – Suggested Solution to Chapter 2
P2–5. (continued)
Req. 4
Apple Inc.
Balance Sheet
At September 26, 2020
(in millions)
ASSETS
Current Assets:
Cash $ 56,818
Short-term investments 49,703
Accounts receivable 22,926
Inventories 4,106
Other current assets 35,230
Total current assets 168,783
Non-Current Assets:
Long-term investments 109,541
Property, plant, and equipment, net 48,359
Other noncurrent assets 32,978
Total non-current assets 190,878
Total assets $359,661
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable $ 46,236
Accrued expenses 43,700
Unearned revenue 5,522
Dividends payable 11,126
Short-term debt 11,670
Total current liabilities 118,254
Non-Current Liabilities:
Long-term debt 110,073
Other noncurrent liabilities 50,503
Total non-current liabilities 160,576
Total liabilities 278,830
Stockholders’ Equity:
Common stock 2
Additional paid-in capital 46,641
Retained earnings 34,188
Total stockholders’ equity 80,831
Total liabilities and stockholders’ equity $359,661
ACCT1101 Introduction to Financial Accounting
Assignment and Discussion Questions – Suggested Solution to Chapter 2
P2–5. (continued)
Req. 5
Current Current Assets $168,783
= = = 1.43
Ratio Current Liabilities $118,254
For every $1 of short-term liabilities, Apple Inc. has approximately $1.43 of current assets.
This suggests that Apple has sufficient current resources to pay current liabilities. Apple has
a very efficient cash management system and keeps its current resources at lower levels to
maximize investment opportunities.