Problem
American Pulp Corp. (APC) has entered into a contract to harvest timber for $450,000. The total estimated available harvest is 150 million board-feet.
(a) What is the depletion allowance for Years 1 to 3, if 42, 45, and 35 million board-feet are harvested by APC in those years?
(b) After 3 years, the total available harvest for the original tract was reestimated at 180 million board-feet. Compute the depletion allowances for Years 4 and beyond.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.