Determine the depletion allowance for each year

Reference no: EM132165535

Question - A 2500-acre tract of timber is purchased by the Houser Paper Company for $1,200,000. The acquisitions department at Houser estimates-the land will be worth $275 per acre once the timber is cleared. The materials department estimates that a total of 5 million board-feet of timber is available from the tract. The harvest schedule calls for equal amounts of the timber to be harvested each year for 5 years. Determine the depletion allowance for each year.

Reference no: EM132165535

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