Phil Collins Realty Corporation purchased a tract
of unimproved land for $55,000.
E9-7 (Relative Sales
Value Method) Phil Collins Realty Corporation purchased a tract
of unimproved land for $55,000. This land was improved and subdivided into
building lots at an additional cost of $34,460. 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
|
$3,000
|
2
|
15
|
$4,000
|
3
|
17
|
$2,400
|
Operating expenses for the year allocated to this
project total $18,200 Lots unsold at the year-end as follows:
Group
|
No. of Lots
|
1
|
5
|
2
|
7
|
3
|
2
|
Instructions
At the end of the fiscal year Phil Collins Realty
Corporation instructs you to arrive at the net income realized on this
operation to date.
TUTORIAL PREVIEW
Group
|
No. of lots
|
Sales price
per lot |
Total
sales price |
Relative sales
price as % |
Cost total
|
Cost allocated
to lots |
Cost per lot
|
1
|
9
|
$3,000
|
$27,000
|
21%
|
$89,460
|
$18,900
|
$2,100
|
2
|
15
|
4,000
|
60,000
|
47%
|
89,460
|
$42,000
|
$2,800
|
File name E9-7 Phil Collins.xls File type: xls PRICE:$7
