Whispering Company owns a 7,000-acre tract of timber purchased in 2006 at a cost of $1,417 per acre. At the time ofpurchase, the land was estimated to have a value of $317 per acre without the timber. Whispering Company has notlogged this tract since it was purchased. In 2020, Whispering had the timber cruised. The cruise (appraiser) estimatedthat each acre contained 8,720 board feet of timber. In 2020, Whispering built 10 miles of roads at a cost of $8,400 permile. After the roads were completed, Whispering logged and sold 3,815 trees containing 926,500 board feet.(a)Your answer is correct.Determine the cost of timber sold related to depletion for 2020. (Round answer to 0 decimal places, e.g.5,125.)(b)Cost of timber sold $eTextbook and MediaYour answer is correct.Depreciation expense $116875If Whispering depreciates the logging roads on the basis of timber cut, determine the depreciation expense for2020. (Round answer to 0 decimal places, e.g. 5,125.)eTextbook and MediaAssistance UsedAttempts: 2 of 15 used1,275Attempts: 4 of 15 used (c)If Whispering plants five seedlings at a cost of $4 per seedling for each tree cut, how should Whispering treat thereforestation?Whispering shouldthe cost of $

Generally, organizations use assets and apply depreciation to the asset. However, the majority of…

Answered: (c) If Whispering plants five seedlings…

(c) If Whispering plants five seedlings at a cost of $4 per seedling for each tree cut, how should Whispering treat the reforestation? Whispering should the cost of $

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 69TA

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Question

Whispering Company owns a 7,000-acre tract of timber purchased in 2006 at a cost of $1,417 per acre. At the time of
purchase, the land was estimated to have a value of $317 per acre without the timber. Whispering Company has not
logged this tract since it was purchased. In 2020, Whispering had the timber cruised. The cruise (appraiser) estimated
that each acre contained 8,720 board feet of timber. In 2020, Whispering built 10 miles of roads at a cost of $8,400 per
mile. After the roads were completed, Whispering logged and sold 3,815 trees containing 926,500 board feet.
(a)
Your answer is correct.
Determine the cost of timber sold related to depletion for 2020. (Round answer to 0 decimal places, e.g.
5,125.)
(b)
Cost of timber sold $
eTextbook and Media
Your answer is correct.
Depreciation expense $
116875
If Whispering depreciates the logging roads on the basis of timber cut, determine the depreciation expense for
2020. (Round answer to 0 decimal places, e.g. 5,125.)
eTextbook and Media
Assistance Used
Attempts: 2 of 15 used
1,275
Attempts: 4 of 15 used

(c)
If Whispering plants five seedlings at a cost of $4 per seedling for each tree cut, how should Whispering treat the
reforestation?
Whispering should
the cost of $

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