Cannington, Inc., designs, manufactures, and markets personal computers and rela

Question

Cannington, Inc., designs, manufactures, and markets personal computers and related software. The following information was taken from a recent annual report o Cannington industries: Property, Plant, and Equipment: Current Year Preceding Year $517,430 491,559 77,615 626,090 657,136 Land and buildings Machinery, equipment, and internal-use software Office furniture and equipment Other fixed assets related to leases Accumulated depreciation and amortization a. Compute the book value of the fixed assets for the current year and the preceding year. Current year book value Preceding year book value b. Would you normally expect the book value of fixed assets to increase or decrease during the year? $300,109 388,073 67,266 470,861 548,476

Explanation / Answer

a calculation of the book value particulars current year preceding year 1 land and building 517430 300190 2 machinery 491559 388073 3 office furniture 77615 67266 4 other fixed assets 626090 470861 5 accumulated depreciation 657136 548476 6 book value ( 1 + 2 + 3 + 4 - 5 ) 1055558 677914 b the book value of the fixed assets has been increased by 377644 ( 1055558 - 677914 ) during the current year

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