I have just discovered this site-and was skimming through the posts. I think I have the book you are looking for.
"The Big Red Apple" It's just like you describe--it's a Rand-McNally Start-Right Elf book, 1968.
You can e-mail me at aleciau@sbcglobal.net
My dad had a book he read to the grand kids. It was a small format Golden book, about 5-6" instead of the more familiar larger format. The picture on the front was a fireplace with a red apple hanging from a string. We think it may have had the grandpa and child in a chair, but many years ago and only sure of the apple and fireplace. Hope someone can help. Thanks