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Just need the depletion expense for 2021 & 2022. Please show work. Thanks in advance Nash Paper Products purchased 10,200 acres of forested timberland in
Just need the depletion expense for 2021 & 2022. Please show work. Thanks in advance
Nash Paper Products purchased 10,200 acres of forested timberland in March 2020. The company paid $1734 per acre for this land, which was above the $816 per acre most farmers were paying for cleared land. During April May June, and July 2020, Nash cut enough timber to build roads using moveable equipment purchased on April 1, 2020. The cost of the roads was $255,150, and the cost of the equipment was $229,500; this equipment was expected to have a $9,180 salvage value and would be used for the next 15 years. Nash selected the straight-line method of depreciation for the moveable equipment. Nash began actively harvesting timber in August and by December had harvested and sold 550,800 board feet of timber of the estimated 6,885,000 board feet available for cutting. In March 2021, Nash planted new seedlings in the area harvested during the winter. Cost of planting these seedlings was $122,000. In addition, Nash spent $8,160 in road maintenance and $6,120 for pest spraying during calendar-year 2021. The road maintenance and spraying are annual costs. During 2021, Nash harvested and sold 789,480 board feet of timber of the estimated 6,579,000 board feet available for cutting. In March 2022, Nash again planted new seedlings at a cost of $153,000, and also spent $15,300 on road maintenance and pest spraying. During 2022, the company harvested and sold 663 do board feet of timber of the estimated 6,630,000 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 in the depletion base. (Round intermediate calculations to 5 decimal places eg. 1.08541 and final answers to 0 decimal places, e.g. 45,892.) 2020 2021 2022 Depletion Expense $ 769500 $ 1076684 $ 804868 Depreciation Expense $ 11016 $ 14688 $ Step by Step Solution
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