Determine the cost of timber sold related to depletion

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Jonas Lumber Company owns a 7,000-acre tract of timber purchased in 2003 at a cost of $1,300 per acre. At the time of purchase the land was estimated to have a value of $300 per acre without the timber. Jonas Lumber Company has not logged this tract since it was purchased. In 2010, Jonas had the timber cruised. The cruise (appraiser) estimated that each acre contained 8,000 board feet of timber. In 2010, Jonas built 10 miles of roads at a cost of $8,400 per mile. After the roads were completed, Jonas logged and sold 3,500 trees containing 880,000 board feet.

(a) Determine the cost of timber sold related to depletion for 2010.

Reference no: EM13160452

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