Chapter 3
Long-Term Assets
104
AP-11A (
5
)
Turpen Corporation purchased a large forest for $12 million on January 1, 2016. Turpen
estimates that 10 million board feet (BF) of lumber can be harvested. After 10 years, Turpen
will sell the land and expects it to be worth $2 million.
Required
a) Record the journal entry for the purchase of the forest.
Date
Account Title and Explanation
Debit
Credit
b) Calculate the unit cost for each BF to be extracted.
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c) During the current year, the company harvested 500,000 board feet. Record the journal
entry to record the harvesting on December 31, 2016.
Date
Account Title and Explanation
Debit
Credit
