Belgrade Lakes Properties is developing a golf course subdivision that includes

Question

Belgrade Lakes Properties is developing a golf course subdivision that includes 225 home lots; 100 lots are golf course lots and will sell for $100,000 each; 125 are street frontage lots and will sell for $70,000. The developer acquired the land for $1,850,000 and spent another $1,450,000 on street and utilities improvement. Compute the amount of joint cost to be allocated to the golf course lots using value basis.(Round your intermediate calculation to one decimal place.)

$2,053,020.

$1,758,900.

$1,541,100.

$1,812,020.

$1,456,180.

Belgrade Lakes Properties is developing a golf course subdivision that includes 225 home lots; 100 lots are golf course lots and will sell for $100,000 each; 125 are street frontage lots and will sell for $70,000. The developer acquired the land for $1,850,000 and spent another $1,450,000 on street and utilities improvement. Compute the amount of joint cost to be allocated to the golf course lots using value basis.(Round your intermediate calculation to one decimal place.)

Explanation / Answer

Belgrade Lake Properties Details Amt $ Land cost        1,850,000 Street & Utilitirs cost        1,450,000 Total Joint cost        3,300,000 No og Golf course lots                    100 Value of each golf course            100,000 Total value of golf Course      10,000,000 No Of street Frontage lots                    125 Value Of street Frontage lots              70,000 Total value of street frontage lots        8,750,000 Total value of gof course & Street frontage lots      18,750,000 % weight of Golf course lot value 53.3% Joint cost allocabe to Golf course on value basis $    1,758,900

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