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FINANCIAL ACCOUNTING
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 to depletion for 2027. (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,125.)
Transcribed Image Text: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 to depletion for 2027. (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,125.)
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