This problem uses the statement of cash flows, but all items are self-explana- tory. IBM is the world's largest computer company. After a few lean years, Big Blue, as the company is called, has rebounded strongly with some new products and improving profits. The following excerpts come from IBM's 19X9 financial statements:

INTERNATIONAL BUSINESS MACHINES CORPORATION Balance Sheet (Adapted) Assets Current assets: (Dollars in Millions) At December 31: 19X9 19X8 Cash and cash equivalents. $ 5.043 $ 5,375 Marketable securities... Notes and accounts receivable-trade, net of allowances 788 393 20.039 18.958 Sales-type leases receivable. 6.220 6.510 Other accounts receivable. 1.359 1.313 Inventories 4.868 5.200 Prepaid expenses and other current assets. 4.838 4.611 Total current assets. 43.155 42.360 Plant, machines, and other property, at cost. 39.616 44.870 Less: Accumulated depreciation. (22.026) (25.239) Plant, machines, and other property- -net 17.590 19.631 Software 663 599 Investments and sundry assets... 26.087 23.510 Total assets. $87.495 $86.100 INTERNATIONAL BUSINESS MACHINES CORPORATION Statement of Cash Flows (Excerpts) (Dollars in Millions) For the year ended December 31: Cash flows from investing activities: Payments for plant, machines, and other property! Cash received from the sale of plant, rental machines. and other property. 19X9 19X8 $(5,959) $(6.520) 1.207 905 Required 1. At December 31. 19X9, what was IBM's cost of its plant assets? What was the amount of accumulated depreciation? What percent of the cost has been used up? 2. IBM's depreciation expense for 19X9 was $6.159 million. Why is the amount of depreci- ation expense so different from accumulated depreciation at December 31, 19X9? 3. How much did IBM pay to purchase plant assets during 19X9? Prepare a T-account showing the 19X8 and 19X9 balances of total Plant Assets at cost. Post the cost of plant asset purchases during 19X9. Then compute the cost of plant assets sold during 19X9. Finally, determine whether IBM bought or sold more plant assets during the year. 4. IBM's balance sheet reports Software. What category of asset is software?