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Question - Riverbed 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 $27,000. 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
$5,700
2
15
7,600
3
4,560
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 Riverbed Realty Corporation instructs you to arrive at the net income realized on this operation to date.
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