Question

Crane Realty Corporation purchased a tract of unimproved land for $52,000. This land was improved and subdivided into building lots at an additional cost of $30,000. 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 $4,500 6,000 3,600 15 16 Operating expenses for the year allocated to this project total $15,000. Lots unsold at the year-end were as follows Group 1 Group 2 Group 3 5 lots 7 lots 2 lots At the end of the fiscal year Crane Realty Corporation instructs you to arrive at the net income realized on this operation to date. (Round ratios for computational purposes to 4 decimal places, eg. 78.723490 and final answer to 0 decimal places, eg. 5,845.) Net income

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Group	No of Lots	Price per lot	Selling Price	Relative Sales Price		Total Cost	Cost Allocated	Cost per Lot	Lot Sold	Total Sale	Total Cost of Goods Sold
				Working		52000+30000
	A	B	A*B=C		D	E	E*D=F	G=F/A	H	I=H*B	J=H*G
1	9	$         4,500	$       40,500	40500/188100	21.53%	$          82,000	$          17,656	$         1,962	4	$ 18,000	$                              7,847
2	15	$         6,000	$       90,000	90000/188100	47.85%	$          82,000	$          39,234	$         2,616	8	$ 48,000	$                            20,925
3	16	$         3,600	$       57,600	57600/188100	30.62%	$          82,000	$          25,110	$         1,569	14	$ 50,400	$                            21,971
			$    188,100				$          82,000			$116,400	$                            50,743
Calculation of Net Income:
Sale	$ 116,400
Less: Cost of Goods Sold	$ -50,743
Gross Profit	$   65,657
Less: Operating Expense	$ -15,000
Net Income	$   50,657