On February 12, 2021, Forest Incorporated purchased the right to remove timber from a 25,000-acre tract of land over the next three years, and the company estimates no residual value. The timber is to be sold as lumber for new home construction. The cost of the timber rights was $360,000, with estimated salable timber feet of 900,000. During 2021 and 2022, Forest harvested and sold 800,000 feet of timber. What is the book value of the timber rights at the end of 2022, assuming the company uses the units-of-production method? Multiple Choice $40,000. $120,000. $125,000. $320,000.

On February 12, 2021, Forest Incorporated purchased the right to remove timber from a 25,000-acre tract of land over the next three years, and the company estimates no residual value. The timber is to be sold as lumber for new home construction. The cost of the timber rights was $360,000, with estimated salable timber feet of 900,000. During 2021 and 2022, Forest harvested and sold 800,000 feet of timber. What is the book value of the timber rights at the end of 2022, assuming the company uses the units-of-production method? Multiple Choice $40,000. $120,000. $125,000. $320,000.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 60P

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