Question
Waterway Realty Corporation purchased a tract of unimproved land for $50,000. This land was improved and subdivided into building lots at an additional cost of
Waterway Realty Corporation purchased a tract of unimproved land for $50,000. This land was improved and subdivided into building lots at an additional cost of $28,000. These building lots were all of the same size but owing to differences in location were offered for sale at different prices as follows.
Group | No. of Lots | Price per Lot | ||||
1 | 9 | $3,900 | ||||
2 | 15 | 5,200 | ||||
3 | 18 | 3,120 |
Operating expenses for the year allocated to this project total $16,000. Lots unsold at the year-end were as follows.
Group 1 | 5 lots | |
Group 2 | 7 lots | |
Group 3 | 2 lots |
At the end of the fiscal year Waterway Realty Corporation instructs you to arrive at the net income realized on this operation to date.
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