Cannington Inc. designs, manufactures, and markets personalcomputers and related software. Cannington also manufactures anddistributes music players (cPod), mobile phones (cPhone), andsmartwatches (Cannington Watch) along with related accessories andservices, including online distribution of third-party music,videos, and applications. The following information was taken froma recent annual report of Cannington:
| Property, Plant, and Equipment (inmillions): |
| Current Year | Preceding Year |
| Land and buildings | $494,500 | | $286,810 | |
| Machinery, equipment, and internal-use software | 469,775 | | 370,875 | |
| Other fixed assets | 598,345 | | 449,995 | |
| Accumulated depreciation and amortization | (628,015) | | (524,170) | |
a. Compute the book value of the fixed assetsfor the current year and the preceding year.
| Current year book value (in millions) | $fill in the blank 1 |
| Preceding year book value (in millions) | $fill in the blank 2 |
A comparison of the book values of the current and precedingyears indicates that they . A comparison of the totalcost and accumulated depreciation reveals that Cannington purchased$fill in the blank 4 million of additional fixed assets, which wasoffset by the additional depreciation expense of $fill in the blank5 million taken during the current year.
b. Would you normally expect Cannington’s bookvalue of fixed assets to increase or decrease during the year?
