Determine the cost of timber sold related to depletion

Assignment Help Financial Accounting

Reference no: EM13906708

Forda Lumber Company owns a 7,000-acre tract of timber purchased in 2007, at a cost of $1300 per acre. At the time of purchase the land was estimated to have a value of $300 per acre without the timber. Forda Lumber Company has not logged this tract since it was purchased. In 2014, Forda had the timber cruised. The cruise (appraiser) estimated that each acre had 8,000 board feet of timber. In 2014, Forda built 10 miles of roads at a cost of $7840 per mile. After yhe roads were completed, Forda logged and sold 3500 trees, containing 850,000 board feet.

1. Determine the cost of timber sold related to depletion in 2014.

2. If Forda depreciates the logging roads on the basis of timber cut, determine the deprceiation expense for 2014.

3. If Forda plants 5 seedlings at a cost of $4 per seedling for each tree cut, how should Forda treat the reforestation?

Reference no: EM13906708

Questions Cloud

Creating a venn diagram in word : A Venn diagram is a useful tool to show the differences and similarities during a comparison such as this. Learn abouyt creating a Venn diagram in word. You can also use Google and Youtube to find a favorite guide

Mentioning that several account balances were estimated : On January 13, 2105, Tamira Nelson, the accountant for Pictron Enterprises, is feeling pressure to complete the annual financial statements. The company president says that she will need up-to-date financial statements to share with the bank on Janua..

What is the productivity of the company : What is the productivity of the company? What is the productivity per employee? The company needs to reduce costs and reduce the number of employees to 750. How much will the productivity decrease?

Should slugger accept this one-time special order : Special order, short-run pricing. Slugger Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the company can produce 50,000 bats a year. Suppose Slugger is currently producing and selling 40,000 bats. At this level o..

Determine the cost of timber sold related to depletion : Forda Lumber Company owns a 7,000-acre tract of timber purchased in 2007, at a cost of $1300 per acre. At the time of purchase the land was estimated to have a value of $300 per acre without the timber. Determine the cost of timber sold related to de..

New fixed assets is required to support this growth in sales : Pumpkin Mfg., Inc., is currently operating at only 92 percent of fixed asset capacity. Current sales are $780,000. Fixed assets are $470,000 and sales are projected to grow to $880,000. How much in new fixed assets is required to support this growth ..

Beginning direct materials inventory consisted : Assume that March’s budgeted sales are 10,000 units. Beginning finished goods inventory contained 1,000 units, and 1,500 units are desired to be on hand at month end. Conversely, beginning direct materials inventory consisted of 1,500 units, but only..

Variance between total budgeted and actual production costs : For the month of April, budgeted sales were $100,000 and budgeted cost of goods sold was $80,000. Actual sales were $80,000 and actual cost of goods sold amounted to $90,000. In preparing its monthly performance report: Assuming a flexible budget, ho..

Record the furtastics purchase of advertising services : Furtastic manufactures imitation fur garments. On June 1, 2016, Furtastic made a sale to Willett’s Department Store under terms that require Willett to pay $150,000 to Furtastic on June 30, 2016. Record the Furtastic’s purchase of advertising service..

User Account

All Pages