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il63 [147K]
3 years ago
6

A company purchased a tract of land for its natural resources at a cost of $1,000,000.

Business
1 answer:
frozen [14]3 years ago
4 0

Answer:

d. $ 0.16 per board feet

Explanation:

From the data in the question, the tract of land is to be depreciated based on the usage method of depreciation,

The computations are as follows:

Cost of tract of land                                                       $ 1,000,000

Less: Estimated salvage value                                      $ ( 200,000)

Depreciable basis for land                                            $  800,000      

Estimated usage from tract of land                               5,000,000 board feet  

Depreciation per board feet

Depreciation basis/ estimated usage  $ 800,000/ 5,000,000  = $ 0.16 per board feet                                                                                

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5 0
3 years ago
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2 years ago
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2 years ago
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4 0
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