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Larkspur Timber Inc, a small private company that follows ASPE, owns 16,500 hectares of timberland purchased in 2007 at a cost of $1,300 per hectare.
Larkspur Timber Inc, a small private company that follows ASPE, owns 16,500 hectares of timberland purchased in 2007 at a cost of $1,300 per hectare. At the time of purchase, the land without the timber was valued at $500 per hectare. In 2008, Larkspur built fire lanes and roads, with a physical life of 30 years, at a cost of $84,000 and separately capitalized these costs. Every year, Larkspur sprays to prevent disease at a cost of $5,000 per year and spends $11,000 to maintain the fire lanes and roads. During 2009, Larkspur selectively logged and sold 800,000 cubic metres of the estimated 4.00 million cubic metres of timber. In 2010, Larkspur planted new seedlings to replace the cut trees at a cost of $150,000. Determine the depletion charge and the portion of depletion included in the cost of timber sold in 2010. Depletion charge $ Provide the journal entries to record the depletion charged to inventory (and subsequently to cost of goods sold) for the year. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account tities and enter for the amounts Round depletion rate to 2 decimal places, es 15.75 and final answer too decimal places, es. 1,525.) Debit Credit Account Titles and Explanation (To record depletion) (To record cost of goods sold) Larkspur has not logged since 2009. Assume that Larkspur logged 980,000 cubic metres of timber in 2020, of which 60% was sold in 2020 and the remainder sold in 2021. The timber Cruiser (the appraiser) had estimated a total resource of 8 million cubic metres. Determine the cost of timber sold that relates to the depletion for 2020 and 2021. Cost of timber sold related to depletion $ Provide the journal entries to account for the cost of timber produced in 2020 and subsequently sold in 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts Do not round intermediate calculations. Round answers to decimal places, es 5.125) Debit Credit Account Titles and Explanation (To record depletion) (lo record cost of goods sold in 2020) (To record cost of goods sold in 2021) Prepare the necessary journal entry to show how Larkspur would account for the maintenance costs of the fire lanes and roads and the spraying of the timberland. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit
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