DEPLETION OF TIMBER. Bedford Ridge Development purchased a 5,000-acre tract of forested land in southern Georgia. The tract contained about 1,500,000 pine trees that, when mature, can be used for utility poles. Bedford paid $900 per acre for the timberland. The land has a residual value of $180 per acre when all the trees are harvested. Bedford will spend a total of $600,000 over the next 4 years building logging roads and other facilities in preparation for harvesting the trees. Beginning in the fifth year following acquisition of the tract, Bedford expects to start harvesting trees.

REQUIRED:

1. Compute the depletion per tree.

2. Would your answer to requirement 1 change if the $600,000 expenditure over the next 4 years were for fire prevention and other normal operating expenditures rather than for depreciable roads and facilities? Explain, and if a different number results, recompute depletion per tree.