Phil Collins Realty Corporation purchased a tract of unimproved land for $55,000
ID: 2486385 • Letter: P
Question
Phil Collins 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 $28,000. These building lots were all of the same size but owing to differences in location were offered for sale at different prices as follows.
Operating expenses for the year allocated to this project total $16,000. Lots unsold at the year-end were as follows.
At the end of the fiscal year Phil Collins 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%. Round cost per lot and final answer to 0 decimal places, e.g. 5,845.)
Net Income: $__________
Group No. of Lots Price per Lot 1 8 $3600 2 17 $4800 3 20 $2400Explanation / Answer
TOTAL COST OF THE LAND (WITH IMPROVING COST) = $83000
GROUP NO. OF LOTS SELLING PRICE PER UNIT TOTAL SELLING PRICE SALES % TOTAL COST COST ALLOCATED COST PER LOT 1 8 $3600 $28800 18% $83000 $14940 $1868 2 17 $4800 $81600 52% $83000 $43160 $2539 3 20 $2400 $48000 30% $83000 $24900 $1245 TOTAL $158400 100% $83000