Please include step by step process on how to solve. Exercise 99 Wildhorse Realt
ID: 2544206 • Letter: P
Question
Please include step by step process on how to solve.
Exercise 99 Wildhorse Realty Corporation purchased a tract of unimproved land for $51,000. This land was improved and subdivided into building lots at an additional cost of $30,000. 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 $5,400 7,200 4,320 17 18 Operating expenses for the year allocated to this project total $15,000. Lots unsold at the year-end were as follows. Group 1 Group 2 Group 3 5 lots 7 lots 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, eg. 5,845.) Net income Click if you would like to Show Work for this question Open Show WorkExplanation / Answer
Relative sales value method No of * price per = selling Relative sales price * total = cost cost per Group lots lot price cost allocated lot 1 9 5,400 48600 48600/248760 81,000 15825 1758 2 17 7,200 122400 122400/248760 81,000 39855 2344 3 18 4,320 77760 77760/248760 81,000 25320 1407 248760 81000 lots * price total Cost per ttoal cost sold per lot sales lot of goods sold Group 1 4 5,400 21600 1758 7033 2 10 7,200 72000 2344 23444 3 16 4,320 69120 1407 22507 162720 52984 Calculation of Net income Sales 162720 less cost of goods sold 52984 Gross profit 109736 Expenses 15,000 Net income 94736 Answer