Shamrock Realty Corporation purchased a tract of unimproved land for $54,000. Th
ID: 2519806 • Letter: S
Question
Shamrock Realty Corporation purchased a tract of unimproved land for $54,000. This land was improved and subdivided into building lots at an additional cost of $29,000. 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
Operating expenses for the year allocated to this project total $18,000. Lots unsold at the year-end were as follows.
At the end of the fiscal year Shamrock 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.)
Group
No. of Lots
Price per Lot
1 9 $3,300 2 17 4,400 3 19 2,640Explanation / Answer
Answer:
Group
No. of Lots
Price per Lot
Total selling price
A
B
C=A*B
1
9
3300
29700
2
17
4400
74800
3
19
2640
50160
Total selling price
154660
Group
Total selling price
Individual
sales %
calculation
Individual
sales %
1
29700
29700/154660
19.20%
2
74800
74800/154660
48.36%
3
50160
50160/154660
32.43%
100.00%
Group
Total
cost
Cost allocation
calculaion
Cost allocation
No. of Lots
Cost per
lot
A
B
C=A/B
1
83000
83000*19.20%
15938.83
9
1771
2
83000
83000*48.36%
40142.25
17
2361
3
83000
83000*32.43%
26918.92
19
1417
Group
No of
lot sold
Price
per lot
total
sale
Cost per lot
Total
cost of good sold
A
B
C=A*B
D
E=D*A
1
4
3300
13200
1771
7084
2
10
4400
44000
2361
23613
3
17
2640
44880
1417
24085
102080
54782
Sales
102080
Less
Cost of goods sold
-54782
Gross profit
47298
Less
Operating expanses
-18000
Net income
29298
Group
No. of Lots
Price per Lot
Total selling price
A
B
C=A*B
1
9
3300
29700
2
17
4400
74800
3
19
2640
50160
Total selling price
154660
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