Relative sales value method.

Doran Realty Company purchased a plot of ground for $2,900,000 and spent $6,100,000 in developing it for building lots. The lots were classified into Highland, Midland, and Lowland grades, to sell at $120,000, $90,000, and $60,000 each, respectively. The number of lots of Highland, Midland, and Lowland grades were 20, 40, and 100 respectively.

During the year, 9 of the Highland, 8 of the Midland, and 62 of the Lowland lots were sold.

Instructions

Complete the tables below to allocate the cost of the lots using a relative sales value method and to determine the sales and gross profit.