Valuing Inventory and Recording Entries Using Relative Sales Value Method Arizona Developers purchased and subdivided a tract
Question:
Valuing Inventory and Recording Entries Using Relative Sales Value Method
Arizona Developers purchased and subdivided a tract of land that cost $ cash into garden lots. The garden lots were divided on the following basis.
used for public walkways and parking
divided into lots selling at $ each Category
divided into lots selling at $ each Category
divided into lots selling at $ each Category
Required
a Prepare the entry for the purchase of the lots for cash. Use the relative sales value method to allocate the total cost of $ to the three inventory categories of lots. Assume a perpetual inventory system.
b During the final month of the year, the walkways and parking were completed included in the $ cost and several sales occurred. Inventory remaining at yearend was: of the $ lots; of the $ lots; and of the $ lots.
Compute the valuation of inventory at yearend.
Prepare the entry for sales and cost of goods sold for each category of lots separately. Assume cash