Given the following owners income and expense estimates

Question # 00003701 Posted By: expert-mustang Updated on: 11/18/2013 10:31 PM Due on: 11/19/2013
Subject Accounting Topic Accounting Tutorials:
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A. Given the following owner’s income and expense estimates for an apartment property, formulate a reconstructed operating statement. The building consists of 10 units that could rent for $550 per month each.

Owner’s Income Statement
Rental income (last year) $60,600
Less: Expenses
Power $2,200
Heat 1,700
Janitor 4,600
Water 3,700
Maintenance 4,800
Reserves 2,800
Management 3,000
Depreciation 5,000
Mortgage payments 6,300 34,100
Net income $26,500

Estimating vacancy and collection losses at 5 percent of potential gross income, reconstruct the operating statement to obtain an estimate of NOI. Remember, there may be items in the owner’s statement that should not be included in the reconstructed operating statement.

B.)Using the NOI obtained above and an Ro of 11.0 percent, calculate the property’s Indicated value. Round your final answer to the nearest $500.
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  1. Tutorial # 00003513 Posted By: expert-mustang Posted on: 11/18/2013 10:33 PM
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