Question

In: Accounting

1. Using Apple’s actual 9/30/17 balance sheet to answer this question, which of the following best...

1. Using Apple’s actual 9/30/17 balance sheet to answer this question, which of the following best represents Apple’s Accounting Equation?

a. $375,319,000,000 = $241,272,000,000 + $134,047,000,000

b. $128,645,000,000 = $100,814,000,000 + $27,831,000,000

c. $194,714,000,000 = $100,814,000,000 + $93,900,000,000

d. $241,272,000,000 = $107,225,000,000 + $134,047,000,000

2. Using Apple’s actual 9/30/17 balances shown in the balance sheet to answer this question, what would be the impact to their accounting equation if Apple took out a new $1,000,000,000 bank loan in exchange for cash?

a. Assets would decrease $1,000,000,000 and Stockholders’ equity would decrease $1,000,000,000

b. Assets would decrease $1,000,000,000 and Liabilities would increase $1,000,000,000

c. Assets would increase $1,000,000,000 and Liabilities would increase $1,000,000,000

d. Assets would increase $1,000,000,000 and Stockholders’ equity would increase $1,000,000,000

3. Using Apple’s actual 9/30/17 balances shown in the balance sheet to answer this question, what would be the new Total Liabilities if Apple took out a new $1,000,000,000 bank loan?

a. $242,272,000,000

b. $376,319,000,000

c. $135,047,000,000

d. $100,814,000,000

Expert Solution

Accounting equation or Balance sheet equation is

Assets = Stockholder's Equity + Total Liabilites

As per Apples Balance sheet on 09/30/2017:

Assets = $375,319 million = $375,319,000,000

Stockholders or Shareholders Equity = $134,047 million = $134,047,000,000

Total liabilites = $241,272 million = $241,272,000,000

Answer is a Assets = Total Liabilities + Shareholders Equity $375,319,000,000 = $241,272,000,000 + $134,047,000,000
Answer is c If Apple took out a new $1,000,000,000 bank loan in exchange for cash, asset in the form of cash will increase by $1,000,000,000 and at the same time liability in the form of bank loan will increase by $1,000,000,000 (since the comapany has as an obligation to repay the bank loan to the bank in future years).
Answer is a Companies Total liabilites before loann taken from the bank = $241,272,000,000 Amount of loan taken from the bank = $1,000,000,000 Total liabilities = $241,272,000,000 + $1,000,000,000 = $242,272,000,000 .

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