Larkfield Logging, Corp purchased the rights to 2,500 acres of forest. Larkfield intends to harvest the entire forest over a period of 10 years. At the end of year 10 the forest will be worthless. Larkfield paid $5,000,000 for the land and estimates to deplete the land for the first 5 years as follows. Depletion Schedule Depletion Acres Expense Year 1 150 Year 2 300 Year 3 250 Page 1 Year 4 150 Year 5 100 Required Calculate the depletion rate per acre. Depletion rate per acre Calculate depletion expense for each of the first five years by completing the Depletion Schedule. Record depletion expense for year 1. General Journal DR CR

eBook The Darlington Equipment Company purchased a machine 5 years ago, prior to the TCJA, at a cost of $80,000. The machine had an expected life of 10 years at the time of purchase, and it is being depreciated by the straight-line method by $8,000 per year. If the machine is not replaced, it can be sold for $5,000 at the end of its useful life. A new machine can be purchased for $170,000, including installation costs. During its 5-year life, it will reduce cash operating expenses by $55,000 per year. Sales are not expected to change. At the end of its useful life, the machine is estimated to be worthless. The new machine is eligible for 100% bonus depreciation at the time of purchase. The old machine can be sold today for $55,000. The firm's tax rate is 25%. The appropriate WACC is 9%. a. If the new machine is purchased, what is the amount of the initial cash flow at Year 0 after bonus depreciation is considered? Cash outflow should be indicated by a minus sign. Round your answer to…

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