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swat32
3 years ago
8

Stanislaw Timber Company owns 9,000 acres of timberland purchased in 2009 at a cost of $1,400 per acre. At the time of purchase,

the land without the timber was valued at $400 per acre. In 2010, Stanislaw built fire lanes and roads, with a life of 30 years, at a cost of $84,000. Every year, Stanislaw sprays to prevent disease at a cost of $3,000 per year and spends $7,000 to maintain the fire lanes and roads. During 2011, Stanislaw selectively logged and sold 700,000 board feet of timber, of the estimated 3,500,000 board feet. In 2012, Stanislaw planted new seedlings to replace the trees cut at a cost of $100,000.
Instructions
a. Determine the depreciation expense and the cost of timber sold related to depletion for 2011.
b. Stanislaw has not logged since 2011. If Stanislaw logged and sold 900,000 board feet of timber in 2022, when the timber cruise (appraiser) estimated 5,000,000 board feet, determine the cost of timber sold related to depletion for 2022.
Business
1 answer:
Delicious77 [7]3 years ago
6 0

Answer:

a. Depreciation expense = Cost/Life =  $84,000/30 = $2,800 per year

b. Cost of timber sold = Per arce - Land value = $1,400 - $400 = $1,000

Timber value = Cost of timber sold * Acre = $1,000 * 9,000 acres = $9,000,000

Land value = Timber value/Estimated Board feet * Sold Board feet = 9,000,000/3,500,000 * 700,000 = $1,800,000

Total Cost of timber sold = Timber value - Land value = $9,000,000 - $1,800,000 = $7,200,000

Depletion = Timber value * [Total Cost of timber sold+Replacement cost/Estimated Board feet]

Depletion = $900,000 * $7,200,000+$100,000/5,000,000

Depletion = $900,000 * 1.46

Depletion = $1,314,000

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Payment id received for merchanise sold on account

4 0
3 years ago
On January 15, 2021, Bella Vista Company enters into a contract to build custom equipment for ABC Carpet Company. The contract s
lesya692 [45]

Answer:

recorded on March 31, 2021.

Explanation:

As we know that if there is an accural basis so the revenue is recognized and recorded when it is earned here the receipt of cash is not material for recording the revenue

Since in the given situation, the date of completion of the contract is considered for recording date of revenue as per the accrual basis

So March 31, 2021 should be considered

 

5 0
3 years ago
Stewart Inc.'s latest EPS was $3.50, its book value per share was $22.75, it had 220,000 shares outstanding, and its debt-to-ass
stellarik [79]

Answer: Option (c) is correct.

Explanation:

Given that,

EPS = $3.50

Book value per share = $22.75

Shares outstanding = 220,000

Debt-to-assets ratio = 46%

Total Equity (Book Value) = Book value per share × Shares outstanding

                    = $22.75 × 220,000

                    = $5,005,000

Total Assets = \frac{Total\ Equity}{1 - Debt\ to\ assets\ ratio}

                     =  \frac{5,005,000}{1 - 0.46}

                     = $9,268,518.52

Debt outstanding = Total Assets - Total Equity

                              = $9,268,518.52 - $5,005,000

                              = $4,263,518.52

                              = $4,263,519 (approx)

5 0
2 years ago
Suppose that a company is a price taker and sells its product for $15 each. This tells us that the firm is participating in the
galben [10]

Answer:

perfect competition; equal to $15

Explanation:

A Perfect competition industry is characterised by :

1. Firms that are price takers - They do not set price but prices are set by the forces of demand and supply.

2. Prices are equal to marginal revenue and average revenue.

3. plenty buyers and sellers.

4 free entry and exist of firms.

A monopolistic industry is chartcerised by :

1. Firms that are price makers.

2. Plenty buyers and sellers.

3. Price and average revenue are less than the marginal revenue

A monopoly is characterised by :

1. Firms that are price makers.

2. One seller

3. Price and average revenue are less than the marginal revenue

6 0
3 years ago
Barb's Bakery made $200 last month selling 100 loaves of bread. This month it made $300 selling 60 loaves of bread. What is the
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The answer will be 150 dollars
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