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Author Question: Johnson Realty bought a 2,000-acre island for $10,000,000 and divided it into 200 equal size lots. ... (Read 60 times)

mpobi80

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Johnson Realty bought a 2,000-acre island for $10,000,000 and divided it into 200 equal size lots.
 As the lots are sold, they are cleared at an average cost of $5,000.
 Storm drains and driveways are installed at an average cost of $8,000 per site.
 Sales commissions are 10% of selling price.
 Administrative costs are $850,000 per year.
The average selling price was $160,000 per lot during 2017 when 50 lots were sold. 

During 2018, the company bought another 2,000-acre island and developed it exactly the same way. Lot sales in 2018 totaled 300 with an average selling price of $160,000. All costs were the same as in 2017. 

Required: 
Prepare income statements for both years using both absorption and variable costing methods.


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Marked as best answer by mpobi80 on Mar 6, 2021

mochi09

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mpobi80

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Reply 2 on: Mar 6, 2021
Wow, this really help


Viet Thy

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Reply 3 on: Yesterday
Excellent

 

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