Marin Paper Products purchased 11,600 acres of forested timberland in March 2017. The company paid $1,972...
Marin Paper Products purchased 11,600 acres of forested
timberland in March 2017. The company paid $1,972 per acre for this
land, which was above the $928 per acre most farmers were paying
for cleared land. During April, May, June, and July 2017, Marin cut
enough timber to build roads using moveable equipment purchased on
April 1, 2017. The cost of the roads was $290,000, and the cost of
the equipment was $261,000; this equipment was expected to have a
$10,440 salvage value and would be used for the next 15 years.
Marin selected the straight-line method of depreciation for the
moveable equipment. Marin began actively harvesting timber in
August and by December had harvested and sold 626,400 board feet of
timber of the estimated 7,830,000 board feet available for
cutting.
In March 2018, Marin planted new seedlings in the area harvested
during the winter. Cost of planting these seedlings was $139,200.
In addition, Marin spent $9,280 in road maintenance and $6,960 for
pest spraying during calendar-year 2018. The road maintenance and
spraying are annual costs. During 2018, Marin harvested and sold
897,840 board feet of timber of the estimated 7,482,000 board feet
available for cutting.
In March 2019, Marin again planted new seedlings at a cost of
$174,000, and also spent $17,400 on road maintenance and pest
spraying. During 2019, the company harvested and sold 754,000 board
feet of timber of the estimated 7,540,000 board feet available for
cutting.
Compute the amount of depreciation and depletion expense for each
of the 3 years (2017, 2018, and 2019). Assume that the roads are
usable only for logging and therefore are included in the depletion
base. (Round answers to 0 decimal places, e.g.
45,892.)
Homework Answers
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Marin Paper Products purchased 11,600 acres of forested
timberland in March 2017. The company paid $1,972...
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Problem 11-07 Vaughn Paper Products purchased 11,500 acres of forested timberland in March 2020. The company...
Problem 11-07 Vaughn Paper Products purchased 11,500 acres of forested timberland in March 2020. The company paid $1,955 per acre for this land, which was above the $920 per acre most farmers were paying for cleared land. During April, May, June, and July 2020, Vaughn cut enough timber to build roads using moveable equipment purchased on April 1, 2020. The cost of the roads was $287,500, and the cost of the equipment was $258,750; this equipment was expected to have...
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owns 9,000 acres of purchased in 2006 at a cost of $1,638 per acre. At the...
owns 9,000 acres of purchased in 2006 at a cost of $1,638 per acre. At the time of purchase, the land without the timber was valued at $468 per acre. In 2007, Pharoah built fire lanes and roads, with a life of 30 years, at a cost of $98,280. Every year, Pharoah sprays to prevent disease at a cost of $3,510 per year and spends $8,190 to maintain the fire lanes and roads. During 2008, Pharoah selectively logged and sold...
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Problem 11-07 Vaughn Paper Products purchased 11,500 acres of forested timberland in March 2020. The company paid $1,955 per acre for this land, which was above the $920 per acre most farmers were paying for cleared land. During April, May, June, and July 2020, Vaughn cut enough timber to build roads using moveable equipment purchased on April 1, 2020. The cost of the roads was $287,500, and the cost of the equipment was $258,750; this equipment was expected to have...
Problem 11-7 Your answer is partially correct. Try again. Kingbird Paper Products purchased 12,300 acres of forested timberland in March 2017. The company paid $2,091 per acre for this land which as above the $984 per acre most farmers ere paying for cleared land. D ring April Hay, June, and July 2017, Kingbird cut enough timber to build roads using moveable equipment purchased on April 1, 2017. The cost o the oads was $307,500 and the cost o the equipment...
owns 9,000 acres of timberland purchased in E11-19 (L04) (Depletion Computations-Timber) Stanislaw Timber Company 2006 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 2007 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 S3,000 per year and spends $7,000 to maintain the fire lanes and...
owns 9,000 acres of purchased in 2006 at a cost of $1,638 per acre. At the time of purchase, the land without the timber was valued at $468 per acre. In 2007, Pharoah built fire lanes and roads, with a life of 30 years, at a cost of $98,280. Every year, Pharoah sprays to prevent disease at a cost of $3,510 per year and spends $8,190 to maintain the fire lanes and roads. During 2008, Pharoah selectively logged and sold...
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