Book Value of Fixed Assets Cannington, Inc

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Book Value of Fixed Assets

Cannington, Inc., designs, manufactures, and markets personal computers and related software. The following information was taken from a recent annual report of Cannington:

Property, Plant, and Equipment (in millions): Current YearPreceding YearLand and buildings$700,930   $406,539   Machinery, equipment, and internal-use software665,884 525,698 Other fixed assets related to leases848,125 637,846 Accumulated depreciation and amortization(890,181) (742,986) 

a. Compute the book value of the fixed assets for the current year and the preceding year.

Current year book value$fill in the blank 1

Preceding year book value$fill in the blank 2

A comparison of the book values of the current and preceding years indicates that they  

 

. A comparison of the total cost and accumulated depreciation reveals that Cannington purchased $fill in the blank 4

 

 million of additional fixed assets, which was offset by the additional depreciation expense of $fill in the blank 5

 

 million taken during the current year.

b. Would you normally expect the book value of fixed assets to increase or decrease during the year?