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MartinezCompany owns a7,500-acre tract of timber purchased in 2006 at a cost of $1,508per acre. At the time of purchase, the land was estimated to
MartinezCompany owns a7,500-acre tract of timber purchased in 2006 at a cost of $1,508per acre. At the time of purchase, the land was estimated to have a value of $348per acre without the timber.MartinezCompany has not logged this tract since it was purchased. In 2020,Martinezhad the timber cruised. The cruise (appraiser) estimated that each acre contained9,280board feet of timber. In 2020,Martinezbuilt10miles of roads at a cost of $7,800per mile. After the roads were completed,Martinezlogged and sold4,060trees containing986,000board feet.
- Determine the cost of timber sold related to depletion for 2020.(Round intermediate calculations to 5 decimal places, e.g. 1.24654 and final answer to 0 decimal places, e.g. 5,125.)
- IfMartinezdepreciates the logging roads on the basis of timber cut, determine the depreciation expense for 2020.(Round intermediate calculations to 5 decimal places, e.g. 1.24654 and final answer to 0 decimal places, e.g. 5,125.)
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