Relative Sales Value Method

On June $1,$ Resort Inc. purchased land at a cost of $$600,000$ cash. The land was divided as follows.

$10\%$ used for public spaces.

$40\%$ divided into $10$ premier lots to sell for $$50,000$ each.

$40\%$ divided into $15$ premium lots to sell for $$35,000$ each.

$10\%$ divided into $5$ standard lots to sell for $$20,000$ each.

Required

a$.$ Prepare the entry for the purchase of the lots. Use the relative sales value method to allocate the total cost of $$600,000$ to the three categories of lots. Assume a perpetual inventory system.

$$ Note: Do not round until your final answer; round your final answer to the nearest whole dollar.

DateAccountDr.Cr$.$June $1$Inventory$$Premier LotsAnswer $1$

Answer $2$

Inventory$$Premium LotsAnswer $3$

Answer $4$

Inventory$$Standard LotsAnswer $5$

Answer $6$

CashAnswer $7$

Answer $8$

To record purchase of lots.

b$.$ As of June $30,$ Resort Inc. had sold $6$ premier lots, $10$ premium lots, and $4$ standard lots. Compute the valuation of inventory by category as of June $30.$

June $30$ Inventory BalanceInventory$$Premier LotsAnswer $9$

Inventory$$Premium LotsAnswer $10$

Inventory$$Standard LotsAnswer $11$