Samtech Manufacturing purchased land and buildings for $3 million. In addition to the purchase price, Samtech incurred

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Question:

Samtech Manufacturing purchased land and buildings for $3 million. In addition to the purchase price, Samtech incurred the following expenses in connection with the purchase of the land and building:


title insurance	ps	35,000
Legal fees to draft the contract.		9,500
Property taxes prorated for the period after the acquisition		55,000
State Transfer Fees		5,900

An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.6 million and $1.2 million, respectively. Shortly after the acquisition, Samtech spent $101,000 to build a parking garage and $59,000 for landscaping.

Required:

Determine the initial valuation of each asset that Samtech acquired in these transactions.

Assets	Initial assessment
Tierra	???
Building	???
Earth improvements	$160,000

Determine the initial valuation of each asset, assuming that immediately after the acquisition, Samtech demolished the building. Demolition costs were $440,000 and salvaged materials sold for $7,000. In addition, Samtech spent $98,000 clearing and grading the site in preparation for the construction of a new building.