Exercise 11-19 Bonita Company owns 9,000 acres of timberland purchased in 2005 a
ID: 2569059 • Letter: E
Question
Exercise 11-19 Bonita Company owns 9,000 acres of timberland purchased in 2005 at a cost of $1,736 per acre. At the time of purchase, the land without the timber was valued at $496 per acre. In 2007, Bonita built fire lanes and roads, with a life of 30 years, at a cost of $104,160. Every year, Bonita sprays to prevent disease at a cost of $3,720 per year and spends $8,680 to maintain the fire lanes and roads. During 2008, Bonita selectively logged and sold 868,000 board feet of timber, of the estimated 4,340,000 board feet. In 2009, Bonita planted new seedlings to replace the trees cut at a cost of s124,000 Determine the depreciation expense and the cost of timber sold related to depletion for 2008. (Round intermediate calculations to 5 decimal places, e.g. 1.54687 and final answers to 0 decimal places, e-g. 5125.) Deprecation expense Cost of timber sold LINK TO TEXT Bonita has not logged since 2008. If Bonita logged and sold 1,116,000 board feet of timber in 2019, when the timber cruise (appraiser) estimated 6,200,000 board feet, determine the cost of timber sold related to depletion for 2019. (Round intermediate calculations to 5 decimal places, e.g. 1.54687 and final answers to o decimal places, e.g 5,125.) Cost of timber sold you would like to sExplanation / Answer
Solution:
Depreciation expense:
=$104,160/30
=$3,472 per year
Depreciation expense for 2008
=$3,472
Cost of timber Sold for 2008:
= (Cost per acre -land value per acre)×acre
= ($1736-$496) ×9000
=$1240×9000
=$ 11,160,000 / 5
= 2,232,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.