Question

Bramble Company owns 9,000 acres of timberland purchased in 2009 at a cost of $1,596 per acre. At the time of purchase, the land without the timber was valued at $456 per acre. In 2010, Bramble built fire lanes and roads, with a life of 30 years, at a cost of $95,760. Every year, Bramble sprays to prevent disease at a cost of $3,420 per year and spends $7,980 to maintain the fire lanes and roads. During 2011, Bramble selectively logged and sold 798,000 board feet of timber, of the estimated 3,990,000 board feet. In 2012, Bramble planted new seedlings to replace the trees cut at a cost of $114,000.

Determine the depreciation expense and the cost of timber sold related to depletion for 2011. (Round intermediate calculations to 5 decimal places, e.g. 1.54687 and final answers to 0 decimal places, e.g. 5,125.)

Depreciation expense		$
Cost of timber sold		$

Bramble has not logged since 2011. If Bramble logged and sold 1,026,000 board feet of timber in 2019, when the timber cruise (appraiser) estimated 5,700,000 board feet, determine the cost of timber sold related to depletion for 2022. (Round intermediate calculations to 5 decimal places, e.g. 1.54687 and final answers to 0 decimal places, e.g. 5,125.)

Cost of timber sold

$

Answer 1

Answer : A) Depreciation expense    = $3,136 per year

Depreciation expense = cost / life time

= 95,760/30 years

= $3,192 per year

Depreciation expense    = $3,192 per year

B) Cost of timber sold :$2,052,001 or 2,052,000

Cost of timber sold = $1,596-$456

= $1,140

= (1,140*9000 acres)/3,990,000

= 10,260,000/3,990,000

= 2.57143*$798,000

= $20,52,001.14

Cost of timber sold =$2,052,001

(b) Cost of timber sold: $1,497,960
	Amount($)
Cost of timberland per acre	$                   1,596
Less: Cost of land per acre	$ 456
Cost of timber per acre	$                   1,140
Total acres	9000
Value of timber in 2009	$ 10,260,000
Less: Depletion in 2011	$ 2,052,000
Add: New seedlings planted in 2012	$ 114,000
Value of timber in 2022	$ 8,322,000
Estimated total board feet	57,00,000
Cost per board foot	$               1.46000
Board feet of timber sold	10,26,000
Cost of timber sold related to depletion	$           1,497,960