Question

Apple Inc. (AAPL) designs, manufactures, and markets personal computers and related software. Apple also manufactures and distributes music players (iPod), mobile phones (iPhone), and smartwatches (Apple 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 Apple:

Property, Plant, and Equipment (in millions):
	Current Year		Preceding Year
Land and buildings	$10,185		$6,956
Machinery, equipment, and internal-use software	44,543		37,038
Other fixed assets	6,517		5,263
Accumulated depreciation and amortization	(34,235)		(26,786)

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

Current year book value (in millions)	$
Preceding year book value (in millions)	$

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 Apple 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 Apple's book value of fixed assets to increase or decrease during the year?
Increase.

Answer 1

Answer

Current year book value (in millions)	$ 27,010
Preceding year book value (in millions)	$ 22,471

Calculations:

Property, Plant, and Equipment (in millions):
	Current Year	Preceding Year
Land and buildings	$         10,185	$               6,956
Machinery, equipment, and internal-use software	$         44,543	$             37,038
Other fixed assets	$           6,517	$               5,263
Total cost	$        61,245	$             49,257
Accumulated depreciation and amortization	$       (34,235)	$           (26,786)
Book value of Assets	$        27,010	$             22,471

Apple purchased $ 11,988 million...

additional depreciation expense of $ 7,449 million taken...

In case of any doubt, please comment.