Question 1 Larkspur Realty Corporation purchased a tract of unimproved land for
ID: 2562246 • Letter: Q
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Question 1 Larkspur Realty Corporation purchased a tract of unimproved land for $50,000. 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 Price per Lot $3,900 5,200 3,120 Group No. of Lots 15 18 Operating expenses for the year allocated to this project total $16,000. 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 Larkspur 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. 78.7234% and final answer to 0 decimal places, eg. 5,845.) Net incomeExplanation / Answer
(a)
(b)
(c)
(d) = (b)*(c)
(e) = (Total Sales Price/169260)*100
(f) = 78000*(e)
(g) = (f)/(d)
Group
Number of Lots
Price Per Lot
Total Sales
Percentage
Total Costs Allocated
Cost per Lot
1
9
3900
35100
20.7373%
16175.12
1797.24
2
15
5200
78000
46.0829%
35944.70
2396.31
3
18
3120
56160
33.1797%
25880.18
1437.79
169260
(a)
(b)
(c)
(d)
(e) = (c) - (d)
(f) = (b)*(e)
Group
Number of Lots Sold
Price Per Lot
Cost per Lot
Gross Profit Per Lot
Total Gross Profit
1
5
3900
1797.23502
2102.765
10513.82488
2
7
5200
2396.31336
2803.687
19625.80645
3
2
3120
1437.78802
1682.212
3364.423963
33504.0553
Less: Expenses
16000
Net Income
17504
(a)
(b)
(c)
(d) = (b)*(c)
(e) = (Total Sales Price/169260)*100
(f) = 78000*(e)
(g) = (f)/(d)
Group
Number of Lots
Price Per Lot
Total Sales
Percentage
Total Costs Allocated
Cost per Lot
1
9
3900
35100
20.7373%
16175.12
1797.24
2
15
5200
78000
46.0829%
35944.70
2396.31
3
18
3120
56160
33.1797%
25880.18
1437.79
169260
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