Samtech Manufacturing purchased land and building for $4 million. In addition to

Question

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:

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 acquisition, Samtech spent $82,000 to construct a parking lot and $40,000 for landscaping.

Determine the initial valuation of each asset Samtech acquired in these transactions. (Enter your answers in whole dollars.)

Assets Initial Valuation

Land

Building

Land Improvements

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:

Explanation / Answer

Answer:

Land=4025000*(3300000/4400000)=$3018750

Building=4025000*(1100000/4400000)=$1006250

Land improvement=82000+40000=122000

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