Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hernandez Timber Company owns 9,000 acres of timberland purchased in 1999 at a cost of $1,512 per acre. At the time of purchase the land
Hernandez Timber Company owns 9,000 acres of timberland purchased in 1999 at a cost of $1,512 per acre. At the time of purchase the land without the timber was valued at $432 per acre. In 2000, Hernandez built fire lanes and roads, with a life of 30 years, at a cost of $90,720. Every year Hernandez sprays to prevent disease at a cost of $3,240 per year and spends $7,560 to maintain the fire lanes and roads. During 2001, Hernandez selectively logged and sold 700,000 board feet of timber, of the estimated 3,500,000 board feet. In 2002, Hernandez planted new seedlings to replace the trees cut at a cost of $108,000. (a) Determine the depreciation expense and the cost of timber sold related to depletion for 2001. (b) Hernandez has not logged since 2001. If Hernandez logged and sold 900,000 board feet of timber in 2009, when the timber cruise (appraiser) estimated 5,000,000 board feet, determine the cost of timber sold related to depletion for 2012
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started