Reference no: EM131613642

Question - Flint Company owns a 8,540-acre tract of timber purchased in 2003 at a cost of $1,586 per acre. At the time of purchase, the land was estimated to have a value of $366 per acre without the timber. Flint Company has not logged this tract since it was purchased. In 2017, Flint had the timber cruised. The cruise (appraiser) estimated that each acre contained 9,760 board feet of timber. In 2017, Flint built 10 miles of roads at a cost of $9,565 per mile. After the roads were completed, Flint logged and sold 4,270 trees containing 1,037,000 board feet.

a) Determine the cost of timber sold related to depletion for 2017

b) If Flint depreciates the logging roads on the basis of timber cut, determine the depreciation expense for 2017.

c) If Flint plants five seedlings at a cost of $5 per seedling for each tree cut, how should Flint treat the reforestation?