Valuing Inventory and Recording Entries Using Relative Sales Value Method

Arizona Developers purchased and subdivided a tract of land that cost $\backslash$$$900,000$ cash into garden lots. The garden lots were divided on the following basis.

$-10\backslash \%$ used for public walkways and parking

$\backslash (\backslash$cdot $\backslash )50\backslash \%$ divided into $75$ lots selling at $\backslash$$$4,000$ each $($Category $1)$

$-30\backslash \%$ divided into $200$ lots selling at $\backslash$$$3,000$ each $($Category $2)$

$-10\backslash \%$ divided into $50$ lots selling at $\backslash$$$2,000$ each $($Category $3)$

Required $\backslash$$$3,000$ lots; and $10$ of the $\backslash$$$2,000$ lots.

$(1)$ Compute the valuation of inventory at year$-$end.

$(2)$ Prepare the entry for sales and cost of goods sold for each category of lots separately. Assume cash sales.

a$.$

b$.$

To record the purchase of lots.

b$.$