Eryn Ltd is a forestry company that owns a plantation forest of silver firs trees. Typically, silver firs trees take 20-50 years until they are mature to harvest. The trees were planted in 2010. At the start of the 2021 financial year, there were 1,520 silver firs trees on the plantation with each valued at $170. At the end of the financial year, due to air pollution, Eryn Ltd had only 1,250 trees but each was valued at $220. Eryn Ltd also had equipment that valued at a book value of $130,000 ($26,000 accumulated depreciation) as at the end of 2021. This equipment was revalued to $140,000. In addition, Eryn Ltd paid $20,000 pruning expenses in 2021. Required: a) Record the appropriate journal entries and show your workings. Accounts Debit $ Credit $ b) Based on your answers in (a), calculate the Earnings Before Interest and Tax and Net Cash Flow from Operations for Eryn Ltd for 2021 and show your workings.
Eryn Ltd is a forestry company that owns a plantation forest of silver firs trees. Typically, silver firs trees take 20-50 years until they are mature to harvest. The trees were planted in 2010. At the start of the 2021 financial year, there were 1,520 silver firs trees on the plantation with each valued at $170. At the end of the financial year, due to air pollution, Eryn Ltd had only 1,250 trees but each was valued at $220. Eryn Ltd also had equipment that valued at a book value of $130,000 ($26,000 accumulated depreciation) as at the end of 2021. This equipment was revalued to $140,000. In addition, Eryn Ltd paid $20,000 pruning expenses in 2021. Required: a) Record the appropriate journal entries and show your workings. Accounts Debit $ Credit $ b) Based on your answers in (a), calculate the Earnings Before Interest and Tax and Net Cash Flow from Operations for Eryn Ltd for 2021 and show your workings.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Eryn Ltd is a forestry company that owns a plantation forest of silver firs trees. Typically, silver firs trees take 20-50 years until they are mature to harvest. The trees were planted in 2010. At the start of the 2021 financial year, there were 1,520 silver firs trees on the plantation with each valued at $170. At the end of the financial year, due to air pollution, Eryn Ltd had only 1,250 trees but each was valued at $220. Eryn Ltd also had equipment that valued at a book value of $130,000 ($26,000 accumulated depreciation) as at the end of 2021. This equipment was revalued to $140,000. In addition, Eryn Ltd paid $20,000 pruning expenses in 2021.
Required:
- a) Record the appropriate
journal entries and show your workings.
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- b) Based on your answers in (a), calculate the Earnings Before Interest and Tax and Net
Cash Flow from Operations for Eryn Ltd for 2021 and show your workings.
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