Home Properties is developing a subdivision that includes 470 home lots. The 210 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 260 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 $101,000. The developer acquired the land for $2,400,000 and spent another $2,400,000 on street and utilities improvements. Assign the joint land and improvement costs of $4,800,000 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 470 home lots. The 210 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 260 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 $101,000. The developer acquired the land for $2,400,000 and spent another $2,400,000 on street and utilities improvements. Assign the joint land and improvement costs of $4,800,000 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

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 76IIP

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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
Home Properties is developing a subdivision that includes 320 home lots. The 150 lots in the Canyon section are below a ridge and do not have views of the neighboring canyons and hills; the 170 lots in the Hilltop section offer unobstructed views. The expected selling price for each Canyon lot is $42,000 and for each Hilltop lot is $105,000. The developer acquired the land for $2,100,000 and spent another $3,000,000 on street and utilities improvements. Assign the joint land and improvement costs of $5,100,000 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
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…
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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 !
Ogren Corporation is considering purchasing a new spectrometer for the firm's R&D department. The purchase price is $70,000 and it would cost another $15,000 to install it. The spectrometer which falls into the MACRS 3-year property class (Year 1-33.33%, Year 2 - 44.44%, Year 3 - 14.82%, and Year 4 - 7.41%) is projected to be sold after three years for $30,000. Use of this equipment would result in an increased net working capital of $4,000 over the life of the machine. The spectrometer would have no effect on revenues, but it is expected to save the firm $35,000 per vear in before-tax operating costs, mainly labor. The firm's tax rate is 40%, and the required rate of return on the project is 11%. What is the after-tax salvage value for the spectrometer?
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Ogren Corporation is considering purchasing a new spectrometer for the firm's R&D department. The purchase price is $70,000 and it would cost another $15,000 to install it. The spectrometer which falls into the MACRS 3-year property class (Year 1-33.33%, Year 2 - 44.44%, Year 3 - 14.82%, and Year 4 - 7.41%) is projected to be sold after three years for $30,000. Use of this equipment would result in an increased net working capital of $4,000 over the life of the machine. The spectrometer would have no effect on revenues, but it is expected to save the firm $35,000 per year in before-tax operating costs, mainly labor. The firm's tax rate is 40%, and the required rate of return on the project is 11%. What amount should be used as the initial cash flow for this project? Why? Short Answer Toolbar navigation
Ogren Corporation is considering purchasing a new spectrometer for the firm's R&D department. The purchase price is $70,000 and it would cost another $15,000 to install it. The spectrometer which falls into the MACRS 3-year property class (Year 1- 33.33%, Year 2- 44.44%, Year 3 - 14.82%, and Year 4 - 7.41%) is projected to be sold after three years for $30,000. Use of this equipment would result in an increased net working capital of $4,000 over the life of the machine. The spectrometer would have no effect on revenues, but it is expected to save the firm $35,000 per year in before-tax operating costs, mainly labor. The firm's tax rate is 40%, and the required rate of return on the project is 11%. What is the NPV of the project? Should the firm accept or reject this project?
Fox River LLC owns a 160 - unit multifamily apartment complex in Charlotte, NC. The value allocated to the land is $4,600,000.00. The annual depreciation is $669,090.90. What percentage of the purchase price is allocated to the land?
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