Question

Shamrock Realty Corporation purchased a tract of unimproved land for $54,000. This land was improved and subdivided into building lots at an additional cost of $29,000. 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			$3,300
2		17			4,400
3		19			2,640

Operating expenses for the year allocated to this project total $18,000. 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 Shamrock 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, e.g. 78.7234% and final answer to 0 decimal places, e.g. 5,845.)

Answer 1

Group	No. of Lots	Price per Lot	Total selling price
	A	B	C=A*B
1	9	3300	29700
2	17	4400	74800
3	19	2640	50160
Total selling price			154660

Group	Total selling price	Individual sales % calculation	Individual sales %
1	29700	29700/154660	19.20%
2	74800	74800/154660	48.36%
3	50160	50160/154660	32.43%
			100.00%

Group	Total cost	Cost allocation calculaion	Cost allocation	No. of Lots	Cost per lot
			A	B	C=A/B
1	83000	83000*19.20%	15938.83	9	1771
2	83000	83000*48.36%	40142.25	17	2361
3	83000	83000*32.43%	26918.92	19	1417

Group	No of lot sold	Price per lot	total sale	Cost per lot	Total cost of good sold
	A	B	C=A*B	D	E=D*A
1	4	3300	13200	1771	7084
2	10	4400	44000	2361	23613
3	17	2640	44880	1417	24085
			102080		54782

Sales	102080
Less
Cost of goods sold	-54782
Gross profit	47298
Less
Operating expanses	-18000
Net income	29298