The following data were taken from recent annual reports of Interstate Bakeries

Question

The following data were taken from recent annual reports of Interstate Bakeries Corporations(IBC). Interstate Bakeries produces, distributes, and sells fresh bakery products nationwide through supermarkets, convenience stores and its 67 bakeries and 1,500 thrift stores

May 31, 2008 June 2, 2007
Land and buildings - $359,133,000 $390,147,000
Machinery and equipment- 820,484,000 865,398,000
Accumulated depreciation- 715,162,000 713,820,000


a. Compute the book value of the fixed assets for 2008 and 2007 and explain the differences, if any.
b. Would you normally expect the book value of fixed assets to increase or decrease during the year?

Explanation / Answer

2008,May -31 2007, June -2 a Land and Buildings 359,133,000.00 390,147,000.00 Machinery and Equipment 820,484,000.00 865,398,000.00 Less : Accumulated Depreciation (715,162,000.00) (713,820,000.00) Book Value of Fixed Assets 464,455,000.00 541,725,000.00 b If no fixed assets have been purchased , the book value of assets would reduce

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