Exercise 9-7 Phil Collins Realty Corporation purchased a tract of unimproved lan
ID: 2499145 • Letter: E
Question
Exercise 9-7
Phil Collins Realty Corporation purchased a tract of unimproved land for $52,000. 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
Operating expenses for the year allocated to this project total $15,500. 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% and final answer to 0 decimal places, e.g. 5,845.)
Group
No. of Lots
Price per Lot
1 9 $4,950 2 17 6,600 3 21 3,300Explanation / Answer
Expenses Incurred = 52000+30000 = 82000
Operating Exp = 15500 for 47 lots = 329.7872 per lot = 37*329.7872 = 12,202
Income : 6*4950 + 11*6600 + 20*3300 = 168,300
Net Income = 168,300 - 82000 - 12202 = 74098
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.