A furniture company buys a forest to obtain wood for manufacturing furniture. The related costs to the forest are:

Cost of buying the forest = $730,000,000

Wood expected to be extracted = 400,000 ton

Cost of restoration of the forest = $120,000,000

Residual/salvage value = $233,000,000

Trees cut in year 1 = 107,000 tons

Trees cut in year 2 = 89,000 tons

Compute the depletion rate and depletion charge for the first 2 years.

Answer rating: 100% (QA)

To compute the depletion rate and depletion charge for the first 2 years we follow these steps Step ... View the full answer