At the beginning of the current year, Diamond Company purchased a tract of land for P 12,000,000. The entity incurred additional cost of P3,000,000 during the remainder of the year in subdividing the land for sale. Of the tract acreage, 70% was subdivided into residential lots and 30% was conveyed to the city for roads and a park. Lot class Number of lots Sale price per lot A 100 240,000 B 100 160,000 C 200 100,000 Using the relative sales value method, what amount of cost should be allocated to Class A lots?
At the beginning of the current year, Diamond Company purchased a tract of land for P 12,000,000. The entity incurred additional cost of P3,000,000 during the remainder of the year in subdividing the land for sale. Of the tract acreage, 70% was subdivided into residential lots and 30% was conveyed to the city for roads and a park. Lot class Number of lots Sale price per lot A 100 240,000 B 100 160,000 C 200 100,000 Using the relative sales value method, what amount of cost should be allocated to Class A lots?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 3RE: Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is...
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At the beginning of the current year, Diamond Company purchased a tract of land for P 12,000,000.
The entity incurred additional cost of P3,000,000 during the remainder of the year in subdividing the land for sale.
Of the tract acreage, 70% was subdivided into residential lots and 30% was conveyed to the city for roads and a park.
Lot class Number of lots Sale price per lot
A 100 240,000
B 100 160,000
C 200 100,000
Using the relative sales value method, what amount of cost should be allocated to Class A lots?
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