Apple Inc. designs, manufactures, and markets personal computers and related software. Apple also manufactures and distributes music players (iPod) and mobile phones (iPhone) 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):

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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Current Year Preceding Year Land and buildings Machinery, equipment, and internal-use software Other fixed assets Accumulated depreciation and amortization $ 16,216 $ 13,587 65,982 54,210 8,205 (49,099) 7,279 (41,293)