at the beginning of 2024, terra lumber company purchased a timber tract from boise cantor for $3,160,000. after the timber is cleared, the land will have a residual value of $780,000. roads to enable logging operations were constructed and completed on march 30, 2024. the cost of the roads, which have no residual value and no alternative use after the tract is cleared, was $238,000. during 2024, terra logged 680,000 of the estimated 6.8 million board feet of timber. required: calculate the 2024 depletion of the timber tract and depreciation of the logging roads, assuming the units-of-production method is used for both assets.

Depreciation is accounting term for the process of reducing the value of an asset over the course of its useful life. A measure of how much an asset has been used is depreciation. It helps organizations to make money from the assets they already own by paying for them over a predetermined period of time. Because firms are not obligated to fully account for them in the year the assets are purchased, the immediate cost of ownership is significantly lowered. If depreciation is not taken into the account, a company's profitability may suffer very dramatically. Businesses may depreciate long-term assets for tax and accounting purposes. Amortization, which is similar to depreciation, accounts for the variation in intangible assets' value over time.

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