Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance $16,000 Legal fees for drawing the contract 5,000 Pro-rated property taxes for the period after the acquisition 36,000 State transfer fees 4,000 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.3 and $1.1 million, respectively. Shortly after the acquisition, Samtech spent $82,000 to construct a parking lot and $40,000 for landscaping. Required: Determine the initial valuation of each asset Samtech acquired in these transactions.
Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building:
|
Title insurance |
$16,000 |
|
Legal fees for drawing the contract |
5,000 |
|
Pro-rated property taxes for the period after the acquisition |
36,000 |
|
State transfer fees |
4,000 |
An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.3 and $1.1 million, respectively. Shortly after the acquisition, Samtech spent $82,000 to construct a parking lot and $40,000 for landscaping.
Required:
Determine the initial valuation of each asset Samtech acquired in these transactions.
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