Arizona Developers purchased and subdivided a tract of land that cost $972,000 cash into garden lots. The garden lots were divided on the following basis. 10% used for public walkways and parking 50% divided into 75 lots selling at $4,000 each (Category 1) 30% divided into 200 lots selling at $3,000 each (Category 2) 10% divided into 50 lots selling at $2,000 each (Category 3) 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 $900,000 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 $900,000 cost) and several sales occurred. Inventory remaining at year-end was: 20 of the $4,000 lots; 50 of the $3,000 lots; and 10 of the $2,000 lots. (1) Compute the valuation of inventory at year-end. (2) Prepare the entry for sales and cost of goods sold for each category of lots separately. Assume cash sales. + + Account Name Inventory-Lot Category 1 Inventory-Lot Category 2 Inventory-Lot Category 3 Cash To record the purchase of lots. b. Inventory-Lot Category 1 $ 0 x Inventory-Lot Category 2 0 x Inventory-Lot Category 3 Total 0 x Dr. 0 0x 0x 0x 900,000 0x Account Name Dr. Cr. Cash 0 0x Cost of Goods Sold 0 0x Sales 0 0x 0 0x To record sale of lots in category 1. Cash 0 0x Cost of Goods Sold 0 0x Sales 0 0x 0 0x To record sale of lots in category 2. Cash 0 0x Cost of Goods Sold 0 0x Sales 0x 0 0x To record sale of lots in category 3. Check