Ayayai Company owns a 7,500-acre tract of timber purchased in 2006 at a cost of $1,534 per acre. At the time of purchase, the land was estimated to have a value of $354 per acre without the timber. Ayayai Company has not logged this tract since it was purchased. In 2020, Ayayai had the timber cruised. The cruise (appraiser) estimated that each acre contained 9,440 board feet of timber. In 2020, Ayayai built 10 miles of roads at a cost of $7,800 per mile. After the roads were completed, Ayayai logged and sold 4,130 trees containing 1,003,000 board feet. (a) Your answer is correct. Determine the cost of timber sold related to depletion for 2020. (Round answer to O decimal places, eg. 5,125.)

Ayayai Company owns a 7,500-acre tract of timber purchased in 2006 at a cost of $1,534 per acre. At the time of purchase, the land was estimated to have a value of $354 per acre without the timber. Ayayai Company has not logged this tract since it was purchased. In 2020, Ayayai had the timber cruised. The cruise (appraiser) estimated that each acre contained 9,440 board feet of timber. In 2020, Ayayai built 10 miles of roads at a cost of $7,800 per mile. After the roads were completed, Ayayai logged and sold 4,130 trees containing 1,003,000 board feet. (a) Your answer is correct. Determine the cost of timber sold related to depletion for 2020. (Round answer to O decimal places, eg. 5,125.)

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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Question

Ayayai Company owns a 7,500-acre tract of timber purchased in 2006 at a cost of $1,534 per acre. At the time of purchase, the land
was estimated to have a value of $354 per acre without the timber. Ayayai Company has not logged this tract since it was purchased.
In 2020, Ayayai had the timber cruised. The cruise (appraiser) estimated that each acre contained 9,440 board feet of timber. In 2020,
Ayayai built 10 miles of roads at a cost of $7,800 per mile. After the roads were completed, Ayayai logged and sold 4,130 trees
containing 1,003,000 board feet.
(a)
Your answer is correct.
Determine the cost of timber sold related to depletion for 2020. (Round answer to O decimal places, eg. 5,125.)
Cost of timber sold
$
125375
eTextbook and Media

(b)
If Ayayai depreciates the logging roads on the basis of timber cut, determine the depreciation expense for 2020. (Round answer to
O decimal places, eg. 5,125.)
Depreciation expense
24
eTextbook and Media

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Ayayai Company owns a 7,500-acre tract of timber purchased in 2006 at a cost of $1,534 per acre. At the time of purchase, the land was estimated to have a value of $354 per acre without the timber. Ayayai Compány has not logged this tract since it was purchased. In 2020, Ayayai had the timber cruised. The cruise (appraiser) estimated that each acre contained 9,440 board feet of timber. In 2020, Ayayai built 10 miles of roads at a cost of $7,800 per mile. After the roads were completed, Ayayai logged and sold 4,130 trees containing 1,003,000 board feet. (a) Determine the cost of timber sold related to depletion for 2020. (Round answer to O decimal places, eg. 5,125.) Cost of timber sold 2$ eTextbook and Media
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