On April 1, 2020, King Timber acquired a tract of land with a stand of timber at a cost of $800,000. The market
value of the land was estimated to be $65,000 with the remainder of the value assigned to the timber. They
estimate that there will be 3,000,000 board feet of timber to harvest on the site. In 2020 and 2021,
respectively, they harvested 400,000 and 850,000 board feet of timber.
REQUIRED: Prepare journal entries to record the depletion expense for on 12/31/2020 and 12/31/21
respectively and compute the book value of the asset on December 31, 2020 and December 31, 2021
assuming units of production method is used. Partial years would be accounted for on a monthly basis.