Book value of fixed assets Cannington Inc. designs, manufactures, and markets personal computers and related software. Cannington also manufactures and distributes music players (cPod), mob phones (cPhone), and smartwatches (Cannington Watch) 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 Cannington: Property, Plant, and Equipment (in millions): Land and buildings Machinery, equipment, and internal-use software Other fixed assets Current Year Current year book value (in millions) $397,977 X Preceding year book value (in millions) 1,213,05 X Preceding Year $739,670 $429,009 702,687 554,753 895,001 673,100 Accumulated depreciation and amortization (939,381). (784,050) a. Compute the book value of the fixed assets for the current year and the preceding year. A comparison of the book values of the current and preceding years indicates that they increased V. A comparison of the total cost and ccumulated depreciatio reveals that Cannington purchased $ -1,412,7: X million of additional fixed assets, which was offset by the additional depreciation expense of $ 155,331 ✓million taken during the current year. b. Would you normally expect Cannington's book value of fixed assets to increase or decrease during the year? Increase
Book value of fixed assets Cannington Inc. designs, manufactures, and markets personal computers and related software. Cannington also manufactures and distributes music players (cPod), mob phones (cPhone), and smartwatches (Cannington Watch) 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 Cannington: Property, Plant, and Equipment (in millions): Land and buildings Machinery, equipment, and internal-use software Other fixed assets Current Year Current year book value (in millions) $397,977 X Preceding year book value (in millions) 1,213,05 X Preceding Year $739,670 $429,009 702,687 554,753 895,001 673,100 Accumulated depreciation and amortization (939,381). (784,050) a. Compute the book value of the fixed assets for the current year and the preceding year. A comparison of the book values of the current and preceding years indicates that they increased V. A comparison of the total cost and ccumulated depreciatio reveals that Cannington purchased $ -1,412,7: X million of additional fixed assets, which was offset by the additional depreciation expense of $ 155,331 ✓million taken during the current year. b. Would you normally expect Cannington's book value of fixed assets to increase or decrease during the year? Increase
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Book value of fixed assets
Cannington Inc. designs, manufactures, and markets personal computers and related software. Cannington also manufactures and distributes music players (cPod), mobila
phones (cPhone), and smartwatches (Cannington Watch) 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 Cannington:
Property, Plant, and Equipment (in millions):
Land and buildings
Machinery, equipment, and internal-use software
Other fixed assets
Current Year
Preceding Year
$739,670
$429,009
702,687
554,753
895,001
673,100
Accumulated depreciation and amortization
(939,381)
(784,050)
a. Compute the book value of the fixed assets for the current year and the preceding year.
Current year book value (in millions) $ 397,977 X
Preceding year book value (in millions) $ 1,213,05 X
A comparison of the book values of the current and preceding years indicates that they increased ✔. A comparison of the total cost and accumulated depreciation
reveals that Cannington purchased $ -1,412,7 X million of additional fixed assets, which was offset by the additional depreciation expense of $ 155,331 million
taken during the current year.
b. Would you normally expect Cannington's book value of fixed assets to increase or decrease during the year?
Increase
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