Rachel Timber Inc., a small private company that follows Canadian ASPE, owns 9,000 hectares of timberland purchased
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(a) Determine the depletion charge and the portion of depletion included in the cost of timber sold for 2003.
(b) Rachel has not logged since 2003. Assume that Rachel logged and sold 900,000 cubic meters of timber in 2014 and the timber cruiser (the appraiser) had estimated a total resource of 5 million cubic meters. Determine the cost of timber sold that relates to the depletion for 2014.
(c) How would Rachel account for the maintenance costs of the fire lanes and roads and the spraying of the timberland?
(d) Discuss the depreciation methods that Rachel could use to depreciate the cost of the fire lanes and roads.
(e) Explain how your answers for parts (a) to (d) would differ if Rachel were a public company and followed IFRS.
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Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
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