21. Apple Inc. designs, manufactures, and markets personal computers and related

Question

21. Apple 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 $ 6,956 $ 4,863 Machinery, equipment, and internal-use software 37,038 29,639 Other fixed assets 5,263 4,513 Accumulated depreciation and amortization (26,786) (18,391) 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

Explanation / Answer

Additional fixed asset purchased :49257-39015 =10242million

Depreciation :26786-18391=8395

b)It is generally expected that apple fixed asset will increase as it requires latest fixed asset and technology for its manufacturing process.

current year preceeding year Land and building 6956 4863 Machinery ,equipmentinternal-use software 37038 29639 Other fixed asset 5263 4513 Total asset 49257 39015 less:Accumulared depreciation and amortisation -26786 -18391 Book value 22471 20624

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