Question C&L Estates is developing a lakeside community thatincludes 300 home lots; 140 lots are lakefront lots andwill sell for $110,000 each; 160 are interior lots and willsell for $70,000 each. The developer acquired the landfor $2,100,000 and spent another $1,800,000 on roadand utility improvements.Compute the amount of joint cost to be allocated to thelakefront lots using a value basis.

Definition of Joint Cost Allocation: Joint cost allocation refers to the process of distributing a…

Answered: C&L Estates is developing a lakeside…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Treetop Associated Group (TAG) is seeking financing for acquisition and development of 147 homesites. The land will cost $1.5 million, and TAG estimates direct development costs to be an additional $2.7 million. City Federal Bank will make a loan covering 40 percent of the land acquisition cost, 100 percent of direct improvement cost, and interest carry at 11 percent interest with a 3 percent loan origination fee. TAG has decided to split the development into two parcel types, standard and deluxe, with the standard parcels comprising 87 of the 147 total homesites. Also, TAG thinks that the deluxe sites will be priced at a $2,000 premium over the standard parcel price of $36,000. The total project revenue will be $5,412,000. After making a 60 percent down payment for the land and incurring closing costs of $50,000, TAG believes that the remaining development costs will be drawn down at $600,000 a month for the first three months and $300,000 a month for the next three months. Parcel…
You purchase a multifamily property for $4,500,000. You commission a cost segregation study to determine how the cost should be allocated and determine the following:\\n\\nLand: 30%\\n\\nResidential Improvements: 55%\\n\\nLand Improvements: 10%\\n\\nFurniture, Fixtures & Equipment: 5%\\n\\nWhat is your projected depreciation expense associated with this property? (Round your answer to the nearest dollar)\\nPlease provide an excel file with labels and formulas, Thank you
Concord Corporation purchased a tract of unimproved land for $647,000. This land was improved and subdivided into building an additional cost of $122,000. These building lots were all of the same size but owing to differences in location were offered for sale at different prices as follows: Group No. of Lots Price per Lot 1 21 $23,600 2 13 19,200 3 9 19,300 Operating expenses for the year allocated to this project total $66,300. Lots unsold at the year-end were as follows: Group 1 9 lots Group 2 3 lots Group 3 4 lots At the end of the fiscal year Concord Corporation instructs you to arrive at the net income realized on this operation to date. (Do not round intermediate calculations. Round final answer to O decimal places, e.g. 5,845.) Net income $ D 505400
Home Properties is developing a subdivision that includes 340 home lots. The 200 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 140 lots in the Hilltop section offer unobstructed views. The expected selling price for each Canyon lot is $47,000 and for each Hilltop lot is $96,000. The developer acquired the land for $1.700,000 and spent another $2,700,000 on street and utilities improvements. Assign the joint land and improvement costs of $4,400,000 to the Canyon section and the Hilltop section using the value basis of allocation. (Do not round your intermediate calculations.) Canyon section Hilltop section Totals Sales Value Numerator Percent of Sales Value Denominator % of Sales Value 0 0 0 Cost to Allocate Allocated Cost Quantity of Lots
Home Properties is developing a subdivision that includes 360 home lots. The 240 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 120 lots in the Hilltop section offer unobstructed views. The expected selling price for each Canyon lot is $43,000 and for each Hilltop lot is $105,000. The developer acquired the land for $2,400,000 and spent another $1,200,000 on street and utilities improvements. Assign the joint land and improvement costs of $3,600,000 to the Canyon section and the Hilltop section using the value basis of allocation. Note: Do not round your intermediate calculations. > Answer is not complete. Sales Value Percent of Sales Value Cost to Allocate Allocated Cost Numerator Denominator Canyon section Hilltop section $ 10,320,000 12,600,000 $ 10,320,000 $ 4,800,000 % of Sales Value 215.00% 12,600,000 4,800,000 (115.00)% Totals $ 22,920,000
Home Properties is developing a subdivision that includes 470 home lots. The 170 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 300 lots in the Hilltop section offer unobstructed views. The expected selling price for each Canyon lot is $51,000 and for each Hilltop lot is $98,000. The developer acquired the land for $2,400,000 and spent another $2,000,000 on street and utilities improvements. Assign the joint land and improvement costs of $4,400,000 to the Canyon section and the Hilltop section using the value basis of allocation. Note: Do not round your intermediate calculations. Canyon section Hilltop section Totals Sales Value Numerator Percent of Sales Value Denominator % of Sales Value Cost to Allocato Allocated Cost
Heart & Home Properties is developing a subdivision that includes 600 home lots. The 450 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 150 lots in the Hilltop section offer unobstructed views. The expected selling price for each Canyon lot is $55,000 and for each Hilltop lot is $110,000. The developer acquired the land for $4,000,000 and spent another $3,500,000 on street and utilities improvements. Assign the joint land and improvement costs to the lots using the value basis of allocation and determine the average cost per lot.
orangutan Corp purchases land worth $2,500,000 to be developed into lottle home lots. The lots will be allocated into one of three categories: lakefront, lakeview, and standard. Lakeside expects that half of the little home lots will be lakefront and sell for $26,000, 30% are lakeview and sell for $10,000 and the remaining lots are priced at $4,500 each. The tract of land is expected to produce 300 lots. Instructions a) Using the relative sales value method calculate the total the inventory value that should be assigned to each category of lots. b) Assume that by the end of year one Lakeside has sold all of its lakefront and lakeview lots. What is the company's gross profit?
A land developer purchased some farmland to build a suburb. The full cost was $2,000,000 and the package was appraised as follows: land: $1,200,000; buildings, $900,000; land improvements, $300,000. In addition, the developer spent $550,000 installing utilities, $1,300,000 preparing the streets and $300,000 building a parking lot. The developer received $100,000 when the topsoil was sold. What amount should be recorded in the Land Improvements account? A)$250,000 B)$2,300,000 C)$600,000 D) $2,400,000 Please explain how and why to calculate impairment, I have tried and used the formula : (Fair Value/Total Fair Value) x purchase price - amount recoverable. This was my calculation but it is incorrect (300000/2450000) x 2000000 - 100000 = 1448980 Please provide the correct formula and how to know where to input each number !
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10. Using the relative sales value method, what amount of cost should be allocated to Class A lots?

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