Apple Computer, Inc., designs, manufactures and markets personal computers and related software....

Question:

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 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 $955 $810
Machinery, equipment, and internal-use software 1,932 1,491
Office furniture and equipment 115 122
Other fixed 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?

Book Value

The cost of holding an asset on a balance sheet of a company is called book value, and it is calculated by netting the item against its accumulated depreciation. However, it is not necessary that book value of asset is same as that of its market value.

Answer and Explanation: 1

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a. Computation of book value:

Current yearPreceeding year
ParticularsAmount($)Amount($)
Land and building955810
Machinery, equipment and software1,...

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What Are Fixed Assets? - Definition & Examples

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Chapter 3 / Lesson 10
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Learn the definition of fixed assets and examine their importance. Explore the various types of fixed assets, identify their characteristics, and see examples.


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