Question
On February 12, 2021, Francisco Incorporated purchased the right to remove timber from a 16,000-acre tract of land over the next three years, and the
On February 12, 2021, Francisco Incorporated purchased the right to remove timber from a 16,000-acre tract of land over the next three years, and the company estimates no residual value. The timber is to be sold as lumber for new home construction. The cost of the timber rights was $162,000, with estimated salable timber feet of 810,000. During 2021 and 2022, Francisco harvested and sold 660,000 feet of timber. What is the book value of the timber rights at the end of 2022, assuming the company uses the units-of-production method?
Multiple Choice
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$166,000.
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$54,000.
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$132,000.
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$30,000.
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