Conan OBrien Logging and Lumber Company owns 3,900 acres of timberland on the north side of Mount Leno, which was purchased in 2002 at a cost of $580 per acre. In 2014, OBrien began selectively logging this timber tract. In May of 2014, Mount Leno erupted, burying the timberland of OBrien under a foot of ash. All of the timber on the OBrien tract was downed. In addition, the logging roads, built at a cost of $150,000, were destroyed, as well as the logging equipment, with a net book value of $348,900.

At the time of the eruption, OBrien had logged 20% of the estimated 520,000 board feet of timber. Prior to the eruption, OBrien estimated the land to have a value of $300 per acre after the timber was harvested. OBrien includes the logging roads in the depletion base.

OBrien estimates it will take 3 years to salvage the downed timber at a cost of $722,800. The timber can be sold for pulp wood at an estimated price of $2 per board foot. The value of the land is unknown, but must be considered nominal due to future uncertainties.

a) Determine the depletion cost per board foot for the timber harvested prior to the eruption of Mount Leno.

Depletion cost per board foot $

b) Prepare the journal entry to record the depletion prior to the eruption.

c) If this tract represents approximately half of the timber holdings of OBrien, determine the amount of the extraordinary loss due to the eruption of Mount Leno for the year ended December 31, 2012.

Extraordinary loss due to the eruption of Mount Leno $