Final answer:
The total joint costs for developing the subdivision including land and street improvements are $3,200,000. The joint costs allocated to golf course lots, using the value basis, is approximately $1,568,000, calculated by first determining the ratio of golf course lots' sales value to total sales value and then multiplying this ratio by total joint costs.
Step-by-step explanation:
To calculate the amount of joint costs to be allocated to the golf course lots using the value basis, we must first determine the total joint costs. The developer's total joint costs for acquiring the land and improving utilities and streets are $1,800,000 (land) + $1,400,000 (improvements) = $3,200,000. The next step is to calculate the total expected sales value for all lots, which is the sum of the sales value of golf course lots and street frontage lots.
Golf course lots: 100 lots × $94,325 per lot = $9,432,500
Street frontage lots: 150 lots × $65,450 per lot = $9,817,500
Total expected sales value: $9,432,500 (golf course lots) + $9,817,500 (street frontage lots) = $19,250,000
Finally, we calculate the ratio of the golf course lots' expected sales value to the total expected sales value and multiply this ratio by the total joint costs to determine the allocation for golf course lots.
Allocation ratio for golf course lots: $9,432,500 / $19,250,000 = 0.49 (approximately)
Allocated joint costs to golf course lots: 0.49 × $3,200,000 = $1,568,000 (approximately)