Wildhorse Realty Corporation purchased a tract of unimproved
land for $121,000. This land was improved and subdivided into
building lots at an additional cost of $75,812. 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 | 9 | $6,600 | ||||
2 | 15 | 8,800 | ||||
3 | 17 | 5,280 |
Operating expenses for the year allocated to this project total
$40,040. 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 Wildhorse 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.)
Net income |
$ |
Group | No of Lots | Sales Price | Total Sales Price | Cost Allocated | Cost per Lot |
1 | 9 | $ 6,600 | $ 59,400 | $ 41,580 | $ 4,620 |
2 | 15 | $ 8,800 | $ 132,000 | $ 92,400 | $ 6,160 |
3 | 17 | $ 5,280 | $ 89,760 | $ 62,832 | $ 3,696 |
Totals | $ 281,160 | $ 196,812 | |||
Group | No of Lot Sold | Cost per lot | Cost of Lots Sold | Sales | |
1 | 4 | $ 4,620 | $ 18,480 | $ 26,400 | |
2 | 8 | $ 6,160 | $ 49,280 | $ 70,400 | |
3 | 15 | $ 3,696 | $ 55,440 | $ 79,200 | |
Totals | $ 123,200 | $ 176,000 |
Net Income = $176000-123200-40040 = $12760
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