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-partymusic, videos, and applications. The following information was taken from a recent an-nual report of Apple:Property, Plant, and Equipment (in millions):PrecedingYearCurrentYearLand and buildings$ 6,956$ 4,863Machinery, equipment, and internal-use softwareOther fixed assets37,03829,6395,2634,513Accumulated depreciation and amortization(26,786)(18,391)a. Compute the book value of the fixed assets for the current year and the precedingyear and explain the differences, if any.Would you normally expect Apple's book value of fixed assets to increaseb.or decrease during the year? Why?

Question
Asked Dec 17, 2019
2 views
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 an-
nual report of Apple:
Property, Plant, and Equipment (in millions):
Preceding
Year
Current
Year
Land and buildings
$ 6,956
$ 4,863
Machinery, equipment, and internal-use software
Other fixed assets
37,038
29,639
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 and explain the differences, if any.
Would you normally expect Apple's book value of fixed assets to increase
b.
or decrease during the year? Why?
help_outline

Image Transcriptionclose

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 an- nual report of Apple: Property, Plant, and Equipment (in millions): Preceding Year Current Year Land and buildings $ 6,956 $ 4,863 Machinery, equipment, and internal-use software Other fixed assets 37,038 29,639 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 and explain the differences, if any. Would you normally expect Apple's book value of fixed assets to increase b. or decrease during the year? Why?

fullscreen
check_circle

Expert Answer

Step 1

The book value of the fixed assets for the current and the preceding year is $22,471 and $20,624 respectively. It is obtained by adding all the assets for the current and preceding year and subtracting the accumulated depreciation from it.

help_outline

Image Transcriptionclose

Compute the book value of fixed assets Particulars Land and building Machinery,equipment,internal-use software Current year Preceding year S6,956 $4,863 $29,639 $4,513 $37,038 Other fixed assets S5,263 Total assets Less: Accumulated depreciation and amortization Book value $49,257 $39,015 ($18,391) S20,624 ($26,786) S22,471

fullscreen
Step 2

Hence, additional fixed asset worth $10,242 is purchased during the current year. It is obtained by comparing the current year total assets of $49,257 and the preceding year total assets of $39,015.

There is also an increase in the depreciation of $8,395 ...

help_outline

Image Transcriptionclose

Current year total asset Purchase of fixed asset during current year =| Preceding year total asset = $49,257 – $39,015 = $10,242 Depreciation = Current year depreciation – Preceding year depreciation = $26,876 – $18,391 = $8,395 Current year book value – Increase in the Book value Preceding year book value = $22, 471– $20,624 = $1,847

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Golden Eagle Company began operations on April 1 by selling a single product. Data on purchases and ...

A: Periodic inventory system: Periodic inventory system is a system in which the inventory is updated i...

question_answer

Q: Quantas Industries sold $325,000 of consumer electronics during July under a nine-month warranty. Th...

A: a. Prepare the journal entry to record the estimated warranty expense on July 31 for July sales.

question_answer

Q: Using the accounting equation Thompson Handyman Services has total assets for the year of $18,400 an...

A: Requirement 1:Calculate the equity using accounting equation.

question_answer

Q: Equipment acquired at the beginning of the year at a cost of $175,000 has an estimated residual valu...

A: Double-declining-balance method: It is an accelerated method of depreciation under which the depreci...

question_answer

Q: FedEx Corporation and United Parcel Service, Inc. compete in the package delivery business. The majo...

A: a. Calculate the fixed asset turnover ratio:

question_answer

Q: Identify each of the following reconciling items as: (a) an addition to the cash balance according t...

A:  

question_answer

Q: Does a discounted note payable provide credit without interest? Discuss.

A: Short-term notes payable: Short-term notes payable is a written promise made by the business to pay ...

question_answer

Q: Prefix Supply Company received a 120-day, 8% note for $450,000, dated April 9, from a customer on ac...

A: Note receivable:Note receivable refers to a written promise received by the creditor from the debtor...

question_answer

Q: The following table shows the sales and average book value of fixed assets for three dif- ferent com...

A: a.Calcualte fixed asset turnover ratios: