Tradition Construction Company purchased land for $4.8 million. Subsequent to the purchase date Tradition paid $800,000 for
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| Tradition Construction Company purchased land for $4.8 million. Subsequent to the purchase date Tradition | |||||||||
| paid $800,000 for land preparation as they were creating lots to sell for a new office park. | |||||||||
| When recording the sale of each lot what value should be used for the cost? Round to the nearest Cent | |||||||||
| NOTE: the streets were constructed previously and now owned by the city. | |||||||||
| Lot | Number | Sales Price | |||||||
| Class | of Lots | per Lot | |||||||
| A | 100 | 32000 | |||||||
| B | 100 | 22000 | |||||||
| C | 200 | 20000 | |||||||
| 400 | |||||||||
| A. What amount should be recorded for cost of each A lot? | |||||||||
| B. What amount should be recorded for cost of each B lot? | |||||||||
| C. What amount should be recorded for cost of each C lot? | |||||||||
| D. At year end Tradition Company had sold 50 Lot Class A Lots, | |||||||||
| 60 Lot Class B Lots, and 120 Lot Class C Lots. | |||||||||
| (1) Total Revenue for the year: | |||||||||
| (2) Net Income for the Year: |
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