Reference no: EM132409089
Question
Teal Company owns 9,000 acres of timberland purchased in 2006 at a cost of $1,414 per acre. At the time of purchase, the land without the timber was valued at $404 per acre. In 2007, Teal built fire lanes and roads, with a life of 30 years, at a cost of $84,840. Every year, Teal sprays to prevent disease at a cost of $3,030 per year and spends $7,070 to maintain the fire lanes and roads. During 2008, Teal selectively logged and sold 707,000 board feet of timber, of the estimated 3,535,000 board feet. In 2009, Teal planted new seedlings to replace the trees cut at a cost of $101,000.
Cost of timber sold?
Teal has not logged since 2008. If Teal logged and sold 909,000 board feet of timber in 2019, when the timber cruise (appraiser) estimated 5,050,000 board feet, determine the cost of timber sold related to depletion for 2019. (Round intermediate calculations to 5 decimal places, e.g. 1.54687 and final answers to 0 decimal places, e.g. 5,125.)
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