Question

Question 2 of 9 0.5/1 E View Policies Show Attempt History Current Attempt in Progress Bonita Company owns 9,000 acres of timberland purchased in 2009 at a cost of $1,526 per acre. At the time of purchase, the land without the timber was valued at $436 per acre. In 2010, Bonita built fire lanes and roads, with a life of 30 years, at a cost of $91,560. Every year, Bonita sprays to prevent disease at a cost of $3,270 per year and spends $7,630 to maintain the fire lanes and roads. During 2011, Bonita selectively logged and sold 763,000 board feet of timber, of the estimated 3,815,000 board feet. In 2012, Bonita planted new seedlings to replace the trees cut at a cost of $109,000. Your answer is correct. Determine the depreciation expense and the cost of timber sold related to depletion for 2011. (Round the final answers to decimal places, eg. 5,125.) Depreciation expenses 3,052 Cost of timber sold S 1.962.000 e Textbook and Media

Answer 1

ANSWER=

A)- Determination of Depreciation Expense and the Cost of Timber Sold Related to Depletion for 2011 were as follows:-

  

i)- Cost of Timber sold to Depleton in 2011:-

Cost of Timberland	$1526 Per Acre
Less:- Cost of Land	$436 Per Acre
Cost of Per Timber=	=$1090 Per Acre
Therefore,
Value of Timber-	$9810000	=(9000 Acres x $1090 Per Acre)
Estimated Board Fee	$3815000
Total Cost Per Board Ft.=	$2.57142 P/B	=($9810000 / 3815000)
Board Feet Timber Sold	763000
Thus,
Cost of Timber sold to Depletion:-	$1962000	=(763000 x 2.57142 P/b)

ii)- Computation of Depreciation Expense:-

Fire Free Lances & Road Cost	$91560
Life of FFL & R	30 Years
Depreciation Expense-	$3052	=($91560 / 30)

(B)-Cost of Timber Sold Related to Depletion For 2022 were:-

Cost of Timber Sold = $9810000 - $1962000 - (7630 + 3270) x 30Years + $109000(Replacement cost in 2012)

= $7630000

Therefore,

Cost of Timber sold to Depletion in 2022= $7630000 / 5450000 x 981000(Boards)

  = $1373400-(Answer)