Book Value of Fixed Assets Cannington, Inc., designs, manufactures, and markets personal computers and related software. The following information was taken from a recent annual report of Cannington: Property, Plant, and Equipment (in millions): Current Year Preceding Year Land and buildings $736,390 $427,106 Machinery, equipment, and internal-use software 699,571 552,293 Other fixed assets related to leases 891,032 670,115
Book Value of Fixed Assets
Cannington, Inc., designs, manufactures, and markets personal computers and related software. The following information was taken from a recent annual report of Cannington:
| Property, Plant, and Equipment (in millions): | ||||
| Current Year | Preceding Year | |||
| Land and buildings | $736,390 | $427,106 | ||
| Machinery, equipment, and internal-use software | 699,571 | 552,293 | ||
| Other fixed assets related to leases | 891,032 | 670,115 | ||
| (935,215) | (780,573) |
a. Compute the book value of the fixed assets for the current year and the preceding year.
| Current year book value | $fill in the blank 1 |
| Preceding year book value | $fill in the blank 2 |
A comparison of the book values of the current and preceding years indicates that they
. A comparison of the total cost and accumulated depreciation reveals that Cannington purchased $fill in the blank 4 million of additional fixed assets, which was offset by the additional depreciation expense of $fill in the blank 5 million taken during the current year.
b. Would you normally expect the book value of fixed assets to increase or decrease during the year?
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