Timber Resource Inc., a forestry company, owns timber resources in northern Quebec. The company produces lumber from these resources. During 20X3, the company cut trees into logs with a fair market value of $600,000. The selling costs estimated at the time were 5% of fair value. At the end of the year, about 20% of these logs have not yet entered production. The 80% that have entered production required $175,000 of production costs to produce lumber into fixed cut lengths that are now available for sale to various customers. By the end of the year, 40% of the lumber was still on hand and ready for sale. There was no work-in-progress at the year-end. Fair-value information for assets owned at the year-end is provided below:

	Timber	Logs	Lumber
Fair Value at end of 20X2	$8,900,000	$110,000	$295,000
Fair Value at end of 20X3	$9,350,000	$125,000	$310,000

Cost to sell are estimated to be 5% for timber, 5% for logs, and 7% for lumber.

Required:

1. Prepare the journal entries to record the transactions during 20X3 as well as any entries needed to adjust year-end balances.

2. Show relevant balances in SCI and SFP related to the above transactions.