E11-21B (Depletion Computations—Timber) Fisk Company owns a 8,000-acre tract of timber purchased in 2007 at a cost of $1,500 per acre. At the time of purchase the land was estimated to have a value of $500 per acre without the timber. Fisk Company has not

E11-21B (Depletion Computations—Timber) Fisk Company owns a 8,000-acre tract of timber purchased in 2007 at a cost of $1,500 per acre. At the time of purchase the land was estimated to have a value of $500 per acre without the timber. Fisk Company has not logged this tract since it was purchased. In 2014, Fisk had the timber cruised. The cruise (appraiser) estimated that each acre contained 5,000 board feet of timber. In 2014, Fisk built 10 miles of roads at a cost of $8,000 per mile. After the roads were completed, Fisk logged and sold 3,500 trees containing 1,000,000 board feet.

Instructions

(a) Determine the cost of timber sold related to depletion for 2014.

(b) If Fisk depreciates the logging roads on the basis of timber cut, determine the depreciation expense for 2014.

(c) If Fisk plants five seedlings at a cost of $2 per seedling for each tree cut, how should Fisk treat the reforestation?