EX 10-21 Book value of fixed assets

Apple Computer, 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 thirdparty music, videos, and applications. The following information was taken from a recent annual report of Apple:

Property, Plant, and Equipment (in millions):

Current

Preceding

Year

Year

Land and buildings

$ 955

$ 810

Machinery, equipment, and internal-use software

1,932

1,491

Offi ce furniture and equipment

115

122

Other fi xed assets related to leases

1,665

1,324

Accumulated depreciation and amortization

1,713

1,292

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 the book value of fixed assets to increase or decrease during the year?

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