1. He walked away with a golden apple in his hand.

2. He walked away, and a golden apple was in his hand.
-----------------------------------
Does #1 mean #2? In #1, is 'in his hand' an adverbial phrase? Or is it an adjective phrase?

2 answers

It's an adverbial phrase. In #1, it modifies the apple, in #2 it tells where the apple was, modifying was. Both 1 and 2 mean the same.
I mis-wrote. #1, "in his hand" modifies the phrase "with a golden apple", which modifies the verb "walked". "with a golden apple" is an adverbial phrase, "He walked away (adverb) with a golden apple (adverb, both modifying 'walked') in his hand (adverb modifying 'with a golden apple'). So, it's an adverb phrase, not adjective.

In #2, as I said, it modifies "was", a phrase called an adverb of place (where the apple was) in both sentences.