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owns 9,000 acres of purchased in 2006 at a cost of $1,638 per acre. At the time of purchase, the land without the timber was valued at $468 per acre. In 2007, Pharoah built fire lanes and roads, with a life of 30 years, at a cost of $98,280. Every year, Pharoah sprays to prevent disease at a cost of $3,510 per year and spends $8,190 to maintain the fire lanes and roads. During 2008, Pharoah selectively logged and sold 819,000 board feet of timber, of the estimated 4,095,000 board feet. In 2009, Pharoah planted new seedlings to replace the trees cut at a cost of $117,000. emter sold relaed to depletion ter ว019. (Round intermediate calculations to S deci nal places, ag. 1.54687 and final answers to decimal places, e 2s.) Cost of timber sold
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Answers are highlighted in yellow: Solution: a) Depreciation Expense (Fire lane and road) (98280/30)- $ 3,276 $ 1,638 S468 $ 1,170 b) Cost of Timberland per acer Less: cost of Land per acer Cost of Timber per acer Value of Timber(9000 1170) Estimated board feet Total Cost per board ft Board feet Timber Sold Cost of timber sold - to depletion 10530000 4095000 $ 2.57 819000 (819000 2.57) 2106000 or $2106001 due to rounding off Value of Timber(9000*1170) Less: sale in 2008 Balance value Add: New Plantation Total Value Estimated board feet Cost per feet Board feet Timber Sold Cost of timber sold 2019 10530000 2106000 8424000 117000 8541000 5850000 1.46 1053000 1537380

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