Please , provide very detail answers to know where you get the numbers.
Homework Answers
(a) Cost of timber sold related to depletion for 2017: $106,250
| Cost of timberland per acre $ | 1300 |
| Less: Cost of land per acre | 300 |
| Cost of timber per acre $ | 1000 |
| Total acres | 7000 |
| Cost of timber $ | 7000000 |
| Estimated total board feet (7000 x 8000) | 56000000 |
| Cost per board foot | 0.125 |
| Board feet harvested and sold 2017 | 850000 |
| Depletion expense 2017 | 106250 |
(b) Depreciation expense for 2017: $1,190
Cost of road = 10 miles x $7840 = $78400
Depreciation expense for 2017 = $78400 x 850000/56000000 = $1189.99 = $1190
(c) Forda should capitalize the cost of (3500 x 5 x $4) = $70000 and adjust the depletion the next time the timber is harvested.
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Please , provide very detail answers to know where you get the
numbers.
E11-21 (L04) (Depletion...
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Grouper Company owns a 7,700-acre tract of timber purchased in
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