(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 Lot |
|
1 |
9 |
$3,000 |
|
2 |
15 |
4,000 |
|
3 |
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 lots |
|
Group 2 |
7 lots |
|
Group 3 |
2 lots |
Instructions
At the end of the fiscal year Larsen Realty Corporation instructs you to arrive at the net income realized on this operation to date.