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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	$568,310		$329,620
Machinery, equipment, and internal-use software	539,895		426,233
Other fixed assets related to leases	687,655		517,162
Accumulated depreciation and amortization	(721,754)		(602,409)

a. Compute the book value of the fixed assets for the current year and the preceding year.

Current year book value
Preceding year book value

A comparison of the book values of the current and preceding years indicates that they:

increased/decreased

. A comparison of the total cost and accumulated depreciation reveals that Cannington purchased $........... million of additional fixed assets, which was offset by the additional depreciation expense of $........... million taken during the current year.

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

Increase/Decrease