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Crane Paper Products purchased 10,100 acres of forested timberland in March 2020. The company paid $1,717 per acre for this land, which was above the
Crane Paper Products purchased 10,100 acres of forested timberland in March 2020. The company paid $1,717 per acre for this land, which was above the $808 per acre most farmers were paying for cleared land. During April, May, June, and July 2020, Crane cut enough timber to build roads using moveable equipment purchased on April 1, 2020. The cost of the roads was $250,350, and the cost of the equipment was $227,250; this equipment was expected to have a $9,090 salvage value and would be used for the next 15 years. Crane selected the straight-line method of depreciation for the moveable equipment. Crane began actively harvesting timber in August and by December had harvested and sold 545,400 board feet of timber of the estimated 6,817,500 board feet available for cutting. In March 2021, Crane planted new seedlings in the area harvested during the winter. Cost of planting these seedlings was $121,000. In addition, Crane spent $8,080 in road maintenance and $6,060 for pest spraying during calendar-year 2021. The road maintenance and spraying are annual costs. During 2021, Crane harvested and sold 781,740 board feet of timber of the estimated 6,514,500 board feet available for cutting. In March 2022, Crane again planted new seedlings at a cost of $151,500, and also spent $15,150 on road maintenance and pest spraying. During 2022, the company harvested and sold 656,500 board feet of timber of the estimated 6,565,000 board feet available for cutting. Compute the amount of depreciation and depletion expense for each of the 3 years (2020, 2021, and 2022). Assume that the roads are usable only for logging and therefore are included depletion base. (Round intermediate calculations to 5 decimal places e.g. 1.08541 and final answers to 0 decimal places, e.g. 45,892.) 2020 2021 2022 Depletion Expense $ 754500 $ 1055349 $ 774670 Depreciation Expense $ 10908 $ 14544 $ 14544
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