Exercise 9-9 Cullumber Realty Corporation purchased a tract of unimproved land f

Question

Exercise 9-9 Cullumber 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 $3,300 4,400 2,640 17 19 Operating expenses for the year allocated to this project total $18,000. 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 Cullumber 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, eg. 78.723496 and final answer to 0 decimal places, eg. 5,845.) Net income e

Explanation / Answer

Group No of lot Unsold Sold Lot Price per lot Sales Value Cost of Goods Sold Gross Profit Expenses Net Income 1 9 5 4 3300 13200 7084 6116 2 17 7 10 4400 44000 23613 20387 3 19 2 17 2640 44880 24085 20795 Total 102080 47298 18000 29298 Group No of lot Price per lot Sales Value Relative Sales price Total Cost Cost Allocated Cost per lot 1 9 3300 29700 19.2034% 83000 15939 1771 2 17 4400 74800 48.3642% 83000 40142 2361 3 19 2640 50160 32.4324% 83000 26919 1417 154660 Sales 102080 Gross Profit 47298 Expense 18000 Net Income 29298

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