A lumber company purchased a tract of timber for $70,000. The value of the 25,000 trees on the tract was established to be $50,000. The value of the land was established to be $20,000. In the first year of operation, the lumber company cut down 5,000 trees. What was the depletion allowance for this year? A lumber company purchased a tract of timber for $70,000. The value of the 25,000 trees on the tract was established to be $50,000. The value of the land was established to be$20,000. In the first year of operation, the lumber company cut down 5,000 trees. What was the depletion allowance for this year?ANSWER:

The method of measure the percentage depletion is PD=percentage depletion rate ×Gross income from…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A lumber company purchased a tract of timber for $70,000. The value of the 25,000 trees on the tract was established to be $50,000. The value of the land was established to be $20,000. In the first year of operation, the lumber company cut down 5,000 trees. What was the depletion allowance for this year?

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