Solution to BTN chapter 8 - Reporting in Action BTN 8-1 1...

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Reporting in Action — BTN 8-1 1. The percent of original cost remaining to be depreciated is computed by taking the ratio of the book value of property and equipment to the original cost ($ millions): As of 9/29/2012: $15,452/ $21,887 = 70.6% As of 9/24/2011: $7,777 / $11,768 = 66.1% 2. In Apple’s “Summary of Significant Accounting Policies" (Note 1: Property, Plant and Equipment ) it discloses estimated useful lives by major asset category as follows: Asset Life (in years) Buildings ................................................................................. 30* Machinery and equipment ..................................................... 2-5 *Or the remaining life of the building, if less 3. The change in total property and equipment before accumulated depreciation for the year ended September 29, 2012, is an increase of $10,119 million ($21,887 – $11,768). In comparison, according to the statement of cash flows, $8,295 thousand cash is used for the purchase of property and equipment. One possible explanation for the difference in these amounts is that Apple likely disposed of property and equipment during the year. Since the investing section of the cash flow statement does not list proceeds
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