PROBLEM 11.

6 - HORNY COMPANY
ITEM
A
B
C
D
E

UNITS
1000
1500
1200
1800
1700

COST
120
110
150
140
130

PROBLEM 11.21 - YEASAYER COMPANY

DEC. 31 -

Loss on Purchase Commitment

Established liability for PC

MAR 31 -

Purchases
Established Liability for PC
Accounts Payable
Gains on PC

PROBLEM 11.22 - LANDMARK COMPANY

FIRST TABLE

SECOND TABLE

PURCHASE PRICE
IMPROVING COST
TOTAL COST

26,850,000.00
43,500,000.00
###

GROUP

NO OF
LOTS

SALES PRICE
PER LOT

20
10
10

3,000,000.00
2,500,000.00
2,000,000.00

1
2
3

THIRD TABLE

GROUP
1
2

COST PER LOT FORMULA

2,010,000.00
(40,200,000.00 * 20) ALLOCATED COST
1,675,000.00
(16,750,000.00 * 20) ALLOCATED COST

1,340,000.00

(13,400,000.00 * 20) ALLOCATED COST

NRV
150
120
140
160
160
inventory value

LOWEST
120
110
140
140
130

at cost
at cost
NRV
at cost
at cost

120,000.00
165,000.00
168,000.00
252,000.00
221,000.00
926,000.00

500,000
500,000
5,400,000
500,000
5,500,000
400,000

SALES
PRICE

FRACTION

60,000,000.00
25,000,000.00
20,000,000.00
105,000,000.00

60/105
25/105
20/105

ALLOCATED COST

40,200,000.00
16,750,000.00
13,400,000.00
70,350,000.00

0,000.00 * 20) ALLOCATED COST MULTIPLY BY NO. OF LOTS

0,000.00 * 20) ALLOCATED COST MULTIPLY BY NO. OF LOTS

UNSOLD
5
4

0,000.00 * 20) ALLOCATED COST MULTIPLY BY NO. OF LOTS

3
COST OF UNSOLD LOTS

COST OF UNSOLD
###
6,700,000.00

4,020,000.00
###