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4. 10 points - George purchased unimproved land for $1,000,000. An additional $1.500, 000 will be spent to turn the land into building lots which
| 4. 10 points - George purchased unimproved land for $1,000,000. An additional $1.500, 000 will be spent to turn the land into building lots which will be sold, making the total investment $2,500,000. Below is a table showing the types of lots, numbers of lots of each type, and the selling price of each type of lot. Using the relative sales value method, determine the total and unit cost to be allocated to each type of lot, and the potential maximum gross profit to be earned on each type of lot, and in total if all lots are sold. | |||
| Lot Type | # of Lots | Selling Price per lot | Retail value of lots |
| A | 100 | $ 10,000 | $ 1,000,000 |
| B | 200 | $ 20,000 | $ 4,000,000 |
| $ 5,000,000 | |||
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Intermediate Accounting Volume 2
Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel
8th Edition
1260881245, 9781260881240
