Reference no: EM132589618

Martinez Company owns a 7,500-acre tract of timber purchased in 2006 at a cost of $1,508 per acre. At the time of purchase, the land was estimated to have a value of $348 per acre without the timber. Martinez Company has not logged this tract since it was purchased. In 2020, Martinez had the timber cruised. The cruise (appraiser) estimated that each acre contained 9,280 board feet of timber. In 2020, Martinez built 10 miles of roads at a cost of $7,800 per mile. After the roads were completed, Martinez logged and sold 4,060 trees containing 986,000 board feet.

Question 1: 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.)

Question 2: If Martinez depreciates 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.)