Wildhorse Timber Company owns 9,000 acres of timberland purchased in 2014 at a cost of $1,652 per acre. At the time of purchase,the land without the timber was valued at $472 per acre. In 2015, Wildhorse built fire lanes and roads, with a life of 30 years, at a costof $99,120. Every year, Wildhorse sprays to prevent disease at a cost of $3,540 per year and spends $8,260 to maintain the fire lanesand roads. During 2016, Wildhorse selectively logged and sold 826,000 board feet of timber, of the estimated 4,130,000 board feet. In2017, Wildhorse planted new seedlings to replace the trees cut at a cost of $118,000.(a)Your Answer Correct Answer (Used)Determine the depreciation expense and the cost of timber sold related to depletion for 2016.(b)Depreciation expense$3,304Cost of timber sold$2,124,000Your answer is incorrect.Wildhorse has not logged since 2016. If Wildhorse logged and sold 1,062,000 board feet of timber in 2027, when the timbercruise (appraiser) estimated 5,900,000 board feet, determine the cost of timber sold related to depletion for 2027. (Do not roundintermediate calculations. Round final answers to O decimal places, e.g. 5,125.)Cost of timber sold$

Step 1:a)Computation of depreciation expense and cost of timber sold as follows :…

Answered: Wildhorse Timber Company owns 9,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concord Timber Company owns 9,000 acres of timberland purchased in 2014 at a cost of $1.470 per acre. At the time of purchase. the land without the timber was valued at $420 per acre. In 2015, Concord built fire lanes and roads, with a life of 30 years, at a cost of $88.200. Every year, Concord sprays to prevent disease at a cost of $3,150 per year and spends $7,350 to maintain the fire lanes and roads. During 2016, Concord selectively logged and sold 735,000 board feet of timber, of the estimated 3,675,000 board feet. In 2017, Concord planted new seedlings to replace the trees cut at a cost of $105,000. Determine the depreciation expense and the cost of timber sold related to depletion for 2016. (b) Depreciation expense Cost of timber sold $ Cost of timber sold $ $ 2940 2,850,000 Concord has not logged since 2016. If Concord logged and sold 945,000 board feet of timber in 2027, when the timber cruise (appraiser) estimated 5,250,000 board feet, determine the cost of timber sold related…
Stanislaw Timber Company owns 9,000 acres of timberland purchased in 2009 at a cost of $1,400 per acre. At the time of purchase, the land without the timber was valued at $400 per acre. In 2010, Stanislaw built fire lanes and roads, with a life of 30 years, at a cost of $84,000. Every year, Stanislaw sprays to prevent disease at a cost of $3,000 per year and spends $7,000 to maintain the fire lanes and roads. During 2011, Stanislaw selectively logged and sold 700,000 board feet of timber, of the estimated 3,500,000 board feet. In 2012, Stanislaw planted new seedlings to replace the trees cut at a cost of $100,000. Instructions a. Determine the depreciation expense and the cost of timber sold related to depletion for 2011. b. Stanislaw has not logged since 2011. If Stanislaw logged and sold 900,000 board feet of timber in 2022, when the timber cruise (appraiser) estimated 5,000,000 board feet, determine the cost of timber sold related to depletion for 2022.
Concord Company owns 9,000 acres of timberland purchased in 2009 at a cost of $1,470 per acre. At the time of purchase, the land without the timber was valued at $420 per acre. In 2010, Concord built fire lanes and roads, with a life of 30 years, at a cost of $88,200. Every year, Concord sprays to prevent disease at a cost of $3,150 per year and spends $7,350 to maintain the fire lanes and roads. During 2011, Concord selectively logged and sold 735,000 board feet of timber, of the estimated 3,675,000 board feet. In 2012, Concord planted new seedlings to replace the trees cut at a cost of $105,000. A-Determine the depreciation expense and the cost of timber sold related to depletion
Bronson Paper Products purchased 10,000 acres of forested timberland in March 2020. The company paid $1,700 per acre for this land, which was above the $800 per acre most farmers were paying for cleared land. During April, May, June, and July 2020, Bronson cut enough timber to build roads using moveable equipment purchased on April 1, 2020. The cost of the roads was $250,000, and the cost of the equipment was $225,000; this equipment was expected to have a $9,000 salvage value and would be used for the next 15 years. Bronson selected the straight-line method of depreciation for the moveable equipment. Bronson began actively harvesting timber in August and by December had harvested and sold 540,000 board feet of timber of the estimated 6,750,000 board feet available for cutting. In March 2021, Bronson planted new seedlings in the area harvested during the winter. Cost of planting these seedlings was $120,000. In addition, Bronson spent $8,000 in road maintenance and $6,000 for pest…
Skysong Paper Products purchased 10,600 acres of forested timberland in March 2020. The company paid $1,802 per acre for this land, which was above the $848 per acre most farmers were paying for cleared land. During April, May, June, and July 2020, Skysong cut enough timber to build roads using moveable equipment purchased on April 1, 2020. The cost of the roads was $265,100, and the cost of the equipment was $238,500; this equipment was expected to have a $9,540 salvage value and would be used for the next 15 years. Skysong selected the straight-line method of depreciation for the moveable equipment. Skysong began actively harvesting timber in August and by December had harvested and sold 572,400 board feet of timber of the estimated 7,155,000 board feet available for cutting.In March 2021, Skysong planted new seedlings in the area harvested during the winter. Cost of planting these seedlings was $127,200. In addition, Skysong spent $8,480 in road maintenance and $6,360 for pest…
Happy Timber, Inc. owns timberland that is used to supply firewood. The timberland was purchased for $480,000 of which $125,000 relates to the land itself, and it is expected to produce 1,000,000 total pieces of firewood over the next 5 years. If 75,000 pieces of firewood are cut and sold during the year, prepare the journal entries for the depletion and sale of the firewood. *Note: should have two iournal entries.
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…
Thornton Moran manages the cutting department of Greene Vernon Company. He purchased a tree-cutting machine on January 1, year 2, for $510,000. The machine had an estimated useful life of 5 years and zero salvage value, and the cost to operate it is $101,000 per year. Technological developments resulted in the development of a more advanced machine available for purchase on January 1, year 3, that would allow a 30 percent reduction in operating costs. The new machine would cost $350,000 and have a 4-year useful life and zero salvage value. The current market value of the old machine on January 1, year 3, is $270,000, and its book value is $408,000 on that date. Straight-line depreciation is used for both machines. The company expects to generate $230,000 of revenue per year from the use of either machine. Required a. Recommend whether to replace the old machine on January 1, year 3. b. Prepare income statements for four years (year 3 through year 6) assuming that the old machine is…
Baird Moran manages the cutting department of Greene Benson Company. He purchased a tree-cutting machine on January 1, Year 2, for $370,000. The machine had an estimated useful life of 5 years and zero salvage value, and the cost to operate it is $85,000 per year. Technological developments resulted in the development of a more advanced machine available for purchase on January 1, Year 3, that would allow a 20 percent reduction in operating costs. The new machine would cost $198,000 and have a 4-year useful life and zero salvage value. The current market value of the old machine on January 1, Year 3, Is $210,000, and Its book value is $296,000 on that date. Straight-line depreciation is used for both machines. The company expects to generate $240,000 of revenue per year from the use of elther machine. Required a. Recommend whether to replace the old machine on January 1, Year 3. b. Prepare Income statements for four years (Year 3 through Year 6) assuming that the old machine c. Prepare…
Baird Moran manages the cutting department of Greene Benson Company. He purchased a tree-cutting machine on January 1, Year 2, for $370,000. The machine had an estimated useful life of 5 years and zero salvage value, and the cost to operate it is $85,000 per year. Technological developments resulted in the development of a more advanced machine available for purchase on January 1, Year 3, that would allow a 20 percent reduction in operating costs. The new machine would cost $198,000 and have a 4-year useful life and zero salvage value. The current market value of the old machine on January 1, Year 3, Is $210,000, and Its book value is $296,000 on that date. Straight-line depreciation is used for both machines. The company expects to generate $240,000 of revenue per year from the use of elther machine. Required a. Recommend whether to replace the old machine on January 1, Year 3. b. Prepare Income statements for four years (Year 3 through Year 6) assuming that the old machine is…
Adams Moran manages the cutting department of Greene Baird Company. He purchased a tree-cutting machine on January 1, year 2, for $360,000. The machine had an estimated useful life of 5 years and zero salvage value, and the cost to operate it is $91,000 per year. Technological developments resulted in the development of a more advanced machine available for purchase on January 1, year 3, that would allow a 25 percent reduction in operating costs. The new machine would cost $210,000 and have a 4-year useful life and zero salvage value. The current market value of the old machine on January 1, year 3, is $198,000, and its book value is $288,000 on that date. Straight-line depreciation is used for both machines. The company expects to generate $220,000 of revenue per year from the use of either machine. Required a. Recommend whether to replace the old machine on January 1, year 3. b. Prepare income statements for four years (year 3 through year 6) assuming that the old machine is…

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