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1. Relative Sales Value Method Larsen 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 $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 Lot1 9 $3,0002 15 4,0003 19 2,000
Operating expenses for the year allocated to this project total $18,200. Lots unsold at the year-end were as follows.
Group 1 5 lotsGroup 2 7 lotsGroup 3 2 lots
At the end of the fiscal year Larsen Realty Corporation instructs you to arrive at the net income realized on this operation to date.
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