Book value of fixed assets Obj. 6 Apple Inc. (AAPL) designs, manufactures, and markets personal computers and related software.

Apple also manufactures and distributes music players (iPod), mobile phones (iPhone), and smartwatches

(Apple Watch) along with related accessories and services, including online distribution of third-party music, videos, and applications. The following information was taken from a recent annual report of Apple:

Property, plant, and equipment (in millions):

Current Year Preceding Year Land and buildings $ 10,185 $ 6,956 Machinery, equipment, and internal-use software 44,543 37,038 Other fixed assets 6,517 5,263 Accumulated depreciation and amortization (34,235) (26,786)

a. Compute the book value of the fixed assets for the current year and the preceding year and explain the differences, if any.

b. Would you normally expect Apple’s book value of fixed assets to increase or decrease during the year? Why?

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