Roseburg Corporation manufactures cardboard containers. In 2017, the company purchased several large tracts of timber for $20 million with the intention of harvesting its own timber rather than buying timber from outside suppliers. However, in 2021, Roseburg abandoned the idea, and sold all of the timber tracts for $30 million. Net income for 2021, before considering this event, was $12 million.Required:Write a memo providing your recommended income statement presentation of the gain on the sale of the timber tracts. Be sure to include a discussion of the alternatives that might be considered.
Roseburg Corporation manufactures cardboard containers. In 2017, the company purchased several large tracts of timber for $20 million with the intention of harvesting its own timber rather than buying timber from outside suppliers. However, in 2021, Roseburg abandoned the idea, and sold all of the timber tracts for $30 million. Net income for 2021, before considering this event, was $12 million.Required:Write a memo providing your recommended income statement presentation of the gain on the sale of the timber tracts. Be sure to include a discussion of the alternatives that might be considered.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 13P
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Roseburg Corporation manufactures cardboard containers. In 2017, the company purchased several large tracts of timber for $20 million with the intention of harvesting its own timber rather than buying timber from outside suppliers. However, in 2021, Roseburg abandoned the idea, and sold all of the timber tracts for $30 million. Net income for 2021, before considering this event, was $12 million.
Required:
Write a memo providing your recommended income statement presentation of the gain on the sale of the timber tracts. Be sure to include a discussion of the alternatives that might be considered.
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