At the beginning of 2016, Terra Lumber Company purchased a timber tract from Boise Cantor for $3,200,000. After the timber is cleared, the land will have a residual value of $600,000. Roads to enable logging operations were constructed and completed on March 30, 2016. The cost of the roads, which have no residual value and no alternative use after the tract is cleared, was $240,000. During 2016, Terra logged 500,000 of the estimated five million board feet of timber. Required: Calculate the 2016 depletion of the timber tract and depreciation of the logging roads assuming the units-ofproduction method is used for both assets.

On January 1,2015, GOGO Company purchased land with valuable natural ore deposits for $20,000,000. At that time, the estimated recoverable output from the mine is $4,000,000 metric tons of ore after which the land is expected to have residual value of $3,000,000. To facilitate the extraction and transportation of the ore, roads were constructed amounting to $1,500,000. In 2015, 2,000,000 metric tons were mined. At the end of 2016, a new estimate of remaining recoverable ore indicated 2,500,000 metric tons are available. During 2016, 1,500,000 metric tons were mined. How much is the depletion expense for the year 2016?

During the reporting period ending 30 June 2014, Sara Limited erected an oil rig in Noosa River. The cost of the rig and associated technology amounted to $99 000 000. The oil rig commenced production on 1 July 2014. At the end of the rig’s useful life, which is expected to be five (5) years, Sara Limited is required by its resource consent to dismantle the oil rig, remove it, and return the site to its original condition. After consulting its own engineers and environmentalists, Sara Limited estimates that if such work was required to be done at the present time it would cost $14 999 995.   If we accept that the rate on 5-year government bonds reflects the relevant time value of money, and if the rate is 4 per cent annually, calculate the present value of the restoration provision which would be today.