![Exercise 11-16 Depreciation and depletion [LO11-2, 11-3] At the beginning of 2018 Terra Lumber Company purchased a timber tra](http://img.homeworklib.com/questions/39c859e0-7420-11ea-b171-d558a083fb52.png?x-oss-process=image/resize,w_560)
Homework Answers
Cost of timber tract = $4,000,000
Residual value = $750,000
Estimated timber quantity = 6,500,000 board feet
Depletion expense per feet of timber = (Cost of timber tract - Residual value)/Estimated timber quantity
= (4,000,000 - 750,000)/6,500,000
= $0.5
Timber logged = 650,000 board feet
Depletion expense for 2018 = Timber logged x Depletion expense per feet of timber
= 650,000 x 0.5
= $325,000
Depreciation expense per feet of timber = Cost of logging roads/Estimated timber quantity
= 312,000/6,500,000
= $0.048
Depreciation of the logging roads = Timber logged x Depletion expense per feet of timber
= 650,000 x 0.048
= $31,200
| Depletion of timber tract | $325,000 |
| Depreciation of the logging roads | $31,200 |
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Exercise 11-16 Depreciation and depletion [LO11-2, 11-3] At the beginning of 2018 Terra Lumber Company purchased...
Please , provide very detail answers to know where you get the numbers. E11-21 (L04) (Depletion...
Please , provide very detail answers to know where you get the
numbers.
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Exercise 11-21 Ivanhoe Company owns a 7,770-acre tract of timber purchased in 2003 at a cost of $1,443 per acre. At the time of purchase, the land was estimated to have a value of $333 per acre without the timber. Ivanhoe Company has not logged this tract since it was purchased. In 2017, Ivanhoe had the timber cruised. The cruise (appraiser) estimated that each acre contained 8,880 board feet of timber. In 2017, Ivanhoe built 10 miles of roads at...
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Kingbird Paper Products purchased 11,000 acres of forested timberland in March 2017. The company paid $1,870...
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Grouper Company owns a 7,700-acre tract of timber purchased in
2006 at a cost of $1,404 per acre. At the time of purchase, the
land was estimated to have a value of $324 per acre without the
timber. Grouper Company has not logged this tract since it was
purchased. In 2020, Grouper had the timber cruised. The cruise
(appraiser) estimated that each acre contained 8,640 board feet of
timber. In 2020, Grouper built 10 miles of roads at a cost...
Problem 11-07 Vaughn Paper Products purchased 11,500 acres of forested timberland in March 2020. The company...
Problem 11-07 Vaughn Paper Products purchased 11,500 acres of forested timberland in March 2020. The company paid $1,955 per acre for this land, which was above the $920 per acre most farmers were paying for cleared land. During April, May, June, and July 2020, Vaughn cut enough timber to build roads using moveable equipment purchased on April 1, 2020. The cost of the roads was $287,500, and the cost of the equipment was $258,750; this equipment was expected to have...
Stellar Company owns a 7,500-acre tract of timber purchased in 2006 at a cost of $1,339...
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Larkspur Company owns a 7,000-acre tract of timber purchased in 2006 at a cost of $1,417...
Larkspur Company owns a 7,000-acre tract of timber purchased in 2006 at a cost of $1,417 per acre. At the time of purchase, the land was estimated to have a value of $317 per acre without the timber. Larkspur Company has not logged this tract since it was purchased. In 2020, Larkspur had the timber cruised. The cruise (appraiser) estimated that each acre contained 8,720 board feet of timber. In 2020, Larkspur built 10 miles of roads at a cost...
Problem 11-7 Your answer is partially correct. Try again. Kingbird Paper Products purchased 12,300 acres of forested timberland in March 2017. The company paid $2,091 per acre for this land which as...
Problem 11-7 Your answer is partially correct. Try again. Kingbird Paper Products purchased 12,300 acres of forested timberland in March 2017. The company paid $2,091 per acre for this land which as above the $984 per acre most farmers ere paying for cleared land. D ring April Hay, June, and July 2017, Kingbird cut enough timber to build roads using moveable equipment purchased on April 1, 2017. The cost o the oads was $307,500 and the cost o the equipment...
Please , provide very detail answers to know where you get the
numbers.
E11-21 (L04) (Depletion Computations—Timber) Forda Lumber Company owns a 7,000-acre tract of timber pur- chased in 2003 at a cost of $1,300 per acre. At the time of purchase, the land was estimated to have a value of $300 per acre without the timber. Forda Lumber Company has not logged this tract since it was purchased. In 2017, Forda had the timber cruised. The cruise (appraiser) estimated...
Exercise 11-21 Ivanhoe Company owns a 7,770-acre tract of timber purchased in 2003 at a cost of $1,443 per acre. At the time of purchase, the land was estimated to have a value of $333 per acre without the timber. Ivanhoe Company has not logged this tract since it was purchased. In 2017, Ivanhoe had the timber cruised. The cruise (appraiser) estimated that each acre contained 8,880 board feet of timber. In 2017, Ivanhoe built 10 miles of roads at...
Sheridan Logging and Lumber Company owns 3,020 acres of timberland on the north side of Mount Leno, which was purchased in 2008 at a cost of $500 per acre. In 2020, Sheridan began selectively logging this timber tract. In May 2020, Mount Leno erupted, burying the timberland of Sheridan under a foot of ash. All of the timber on the Sheridan tract was downed. In addition, the logging roads, built at a cost of $144,100, were destroyed, as well as...
Kingbird Paper Products purchased 11,000 acres of forested timberland in March 2017. The company paid $1,870 per acre for this land, which was above the $880 per acre most farmers were paying for cleared land. During April, May, June, and July 2017, Kingbird cut enough timber to build roads using moveable equipment purchased on April 1, 2017. The cost of the roads was $275,000, and the cost of the equipment was $247,500; this equipment was expected to have a $9,900...
Grouper Company owns a 7,700-acre tract of timber purchased in
2006 at a cost of $1,404 per acre. At the time of purchase, the
land was estimated to have a value of $324 per acre without the
timber. Grouper Company has not logged this tract since it was
purchased. In 2020, Grouper had the timber cruised. The cruise
(appraiser) estimated that each acre contained 8,640 board feet of
timber. In 2020, Grouper built 10 miles of roads at a cost...
Problem 11-07 Vaughn Paper Products purchased 11,500 acres of forested timberland in March 2020. The company paid $1,955 per acre for this land, which was above the $920 per acre most farmers were paying for cleared land. During April, May, June, and July 2020, Vaughn cut enough timber to build roads using moveable equipment purchased on April 1, 2020. The cost of the roads was $287,500, and the cost of the equipment was $258,750; this equipment was expected to have...
Larkspur Company owns a 7,000-acre tract of timber purchased in 2006 at a cost of $1,417 per acre. At the time of purchase, the land was estimated to have a value of $317 per acre without the timber. Larkspur Company has not logged this tract since it was purchased. In 2020, Larkspur had the timber cruised. The cruise (appraiser) estimated that each acre contained 8,720 board feet of timber. In 2020, Larkspur built 10 miles of roads at a cost...
Problem 11-7 Your answer is partially correct. Try again. Kingbird Paper Products purchased 12,300 acres of forested timberland in March 2017. The company paid $2,091 per acre for this land which as above the $984 per acre most farmers ere paying for cleared land. D ring April Hay, June, and July 2017, Kingbird cut enough timber to build roads using moveable equipment purchased on April 1, 2017. The cost o the oads was $307,500 and the cost o the equipment...
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