Please answer 3 case Questions: 1. Compared to the typical point-of-sale accounting method, what are likely effects on income statement, balance sheet, and statement of cash flow of Apple’s choice to use a subscription method for revenue recognition for its iPhone? Also discuss advantages and disadvantages of subscription accounting.
2. Could Apple have structured sales of Apple TV and the iPhone to avoid ‘subscription accounting’? If so, how? 3. As an analyst evaluating Apple’s success, how would you compare Apple’s sales and gross profit across time and to other companies?