Solution to BTN-Chapter 4

# Solution to BTN-Chapter 4 - Reporting in Action BTN 4-1 1...

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Reporting in Action — BTN 4-1 1. Compute cost of sales for 2012 as follows (\$ millions) September 24, 2011 inventory .............................. \$ 776 Plus cost of goods purchased .............................. ? Less September 29, 2012 inventory ..................... (791 ) Cost of goods sold ................................................ \$87 ,846 Then, solve for: Cost of goods purchased * ................................... \$87 ,861 *(\$87,846 - \$776 + \$791) 2. 2012 2011 (\$ millions) Current Ratio Acid-Test Ratio Current Ratio Acid-Test Ratio Current assets Cash and equivalents ................ \$10,746 \$10,746 \$9,815 \$9,815 Short-term marketable sec ......... 18,383 18,383 16,137 16,137 Accounts receivables, net .......... 10,930 10,930 5,369 5,369 Inventories, net .......................... 791 776 Deferred tax assets .................... 2,583 2,014 Vendor non-trade receivables ..... 7,762 6,348 Other current assets .................. 6,458 ________ 4,529 ________ Total current assets ..................... \$57,653 \$44,988 Total quick assets ....................... \$40,059 \$31,321 Total current liabilities .................. \$38,542 \$38,542 \$27,970 \$27,970 Ratio .......................................... 1.50 1.04 1.61 1.12 Interpretation : The current ratio decreased from 1.61 in 2011 to 1.50 in 2012. The acid-test ratio decreased from 1.12 in 2011 to 1.04 in 2012. The year-to-year comparison shows that Apple’s liquidity position has declined slightly when considering the current ratio and the acid-test ratio. However, in both years its current ratio is at or above the industry average of 1.5 but below the rule-of-thumb ratio of 2.0. A similar interpretation

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