Question

Flounder Realty Corporation purchased a tract of unimproved land for $55,000. This land was improved and subdivided into building lots at an additional cost of $27,000. These building lots were all of the same size but owing to differences in location were offered for sale at different prices as follows.

Group		No. of Lots			Price per Lot
1		8			$4,200
2		16			5,600
3		18			3,360

Operating expenses for the year allocated to this project total $17,000. Lots unsold at the year-end were as follows.

Group 1		5 lots
Group 2		7 lots
Group 3		2 lots

At the end of the fiscal year Flounder Realty Corporation instructs you to arrive at the net income realized on this operation to date. (Round ratios for computational purposes to 4 decimal places, e.g. 78.7234% and final answer to 0 decimal places, e.g. 5,845.)

Answer 1

Calculation of Net Income
Sales	183,680.00
Cost of Tract Sold	61,500.00
Operating Expenses	17,000.00
Net Income	105,180.00

Group	No. of Lots	Price Per Lot	Gross Sales
1	8	4,200.00	33,600.00
2	16	5,600.00	89,600.00
3	18	3,360.00	60,480.00
			183,680.00

Cost of Tract	55,000.00
cost of Improvement	27,000.00
Total Cost of Tract land	82,000.00

	Group1	Group2	Group3	Total
No. of unsold lots	5	7	2	14
No. of Lots Sold	8	16	18	42
	13	23	20	56
Cost of Tract land	19,036	33,679	29,286	82,000
Cost of Unsold Tract land	7,321	10,250	2,929	20,500
Cost of sold Tract land	11,714	23,429	26,357	61,500

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