in March 2017. The company paid $1,785 per acre for this land, which was above t
ID: 2519433 • Letter: I
Question
in March 2017. The company paid $1,785 per acre for this land, which was above the on April 1, 2017. The cost of the roads was $262,500, and the cost of the to of had harvested and sold 567,000 board feet of timber of the estimated 7,087,500 board feet available for cutting. calendar-year 2018. The road maintenance and spraying are annual costs. During 2018, Bonita harvested and sold 812,700 board feet of timber of the estimated 6,772,500 board feet available for cutting. In March 2019, Bonita again planted new seedlings at a cost of $157,500, and also spent $15,750 on road maintenance and pest spraying. During 2019, the company harvested and sold 682,500 board feet of timber of the estimated 6,825,000 board feet available for cutting. the amount of and depletion expense for each of the 3 years (2017, 2018, and 2019). Assume that the roads are usable only for logging and therefore are included in the depletion base. (Round answers to 0 decimal places,e.g. 45,892.)Explanation / Answer
2017 :-
Cost of Timber / acre = $1785 - $840 = $945 per acre
Total Timber cost = 10500 * $945 = $9922500
Timber cost (Base on Depletion) = $9922500 + $262500 = $10185000
Depletion for 2017 = $10185000 * (567000 / 7087500) = $814800
Annual Depreciation of Equipment = (Cost - Salvage Value) / Life
= ($236250 - $9450) / 15
= $15120
Depreciation for 2017 = $15120 * (10/12) = $12600
2018 :-
Timber Cost for 2018 = $10185000 - $814800
= $9370200
Timber Cost (Base on Depletion) = $9370200 + $126000 = $9496200
Depletion for 2018 = $9496200 * (812700/6772500) = $1139544
Depreciation for 2018 = $15120
2019 :-
Timber Cost for 2019 = $9496200 - $1139544 = $8356656
Timber Cost (Base on Depletion) = $8356656 + $157500 = $8514156
Depletion for 2018 = $8514156 * (682500/6825000) = $851416
Depreciation for 2018 = $15120
Expenses 2017 2018 2019 Depletion Expense $814800 $1139544 $851416 Depreciation Expense $12600 $15120 $15120Related Questions
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