Sweet Realty Corporation purchased a tract of unimproved lan

Sweet Realty Corporation purchased a tract of unimproved land for $50,000. 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 8 $5,700 2 15 7,600 3 17 4,560 Operating expenses for the year allocated to this project total $17,000. 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 Sweet 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.) Net income $

Solution

Total cost

Land purchased : 50000

improvment cost :30000

Operating cost : 17000

Total : 97000

Realized revenue :

Lot 1 5700 * (8-5) : 17100

Lot 2 7600 * (15-7): 60800

lot 3 4560 * (17-2): 68400

Total 146300

Net income realized : 146300-97000 = 49300$