Book value of fixed assets OBJ. 6 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):

Current Year Preceding Year Land and buildings $ 2,439 $2,059 Machinery, equipment, and internal-use software 15,743 6,926 Office furniture and equipment 241 184 Other fixed assets related to leases 3,464 2,599 Accumulated depreciation and amortization 6,435 3,991

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?