Reference no: EM132961795

Problem 1: In January Year 3, Jost Co. purchased 50 acres of forest land for $800,000, with timber to be extracted estimated at 1,000,000 board feet. After all the timber has been cut, Jost will be required by law to plant tree seedlings to restore the land at an estimated cost of $200,000. Jost expects to sell the land for $80,000 after extracting the timber. During Year 3, Jost incurred $150,000 of development costs for logging roads and harvested 100,000 board feet of timber, 75,000 of which was sold. In its Year 3 income statement, what amount should Jost report as depletion expense?