Samtech Manufacturing purchased land and building for $3 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance Lagal fees for drawing the contract Pro-rated property taxes for the period after acquisition State transfer fees $35,000 9,500 55,000 5,900 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.6 and $1.2 million, respectively. Shortly after acquisition, Samtech spent $101,000 to construct a parking lot and $59,000 for landscaping. Required: 1. Determine the initial valuation of each asset Samtech acquired in these transactions. 2. Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $440,000 and the salvaged materials were sold for $7.000. In addition, Samtech spent $98,000 clearing and grading the land in preparation for the construction of a new building. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 Required 2 >
Samtech Manufacturing purchased land and building for $3 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance Lagal fees for drawing the contract Pro-rated property taxes for the period after acquisition State transfer fees $35,000 9,500 55,000 5,900 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.6 and $1.2 million, respectively. Shortly after acquisition, Samtech spent $101,000 to construct a parking lot and $59,000 for landscaping. Required: 1. Determine the initial valuation of each asset Samtech acquired in these transactions. 2. Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $440,000 and the salvaged materials were sold for $7.000. In addition, Samtech spent $98,000 clearing and grading the land in preparation for the construction of a new building. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 Required 2 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Samtech Manufacturing purchased land and building for $3 million. In addition to the purchase price, Samtech made the
following expenditures in connection with the purchase of the land and building:
$35,000
9,500
55,000
5,900
Title insurance
Legal fees for drawing the contract
Pro-rated property taxes for the period after acquisition
State transfer fees
An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.6 and $1.2 million,
respectively. Shortly after acquisition, Samtech spent $101,000 to construct a parking lot and $59,000 for landscaping.
Required:
1. Determine the initial valuation of each asset Samtech acquired in these transactions.
2. Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building.
Demolition costs were $440,000 and the salvaged materials were sold for $7000. In addition, Samtech spent $98,000
clearing and grading the land in preparation for the construction of a
new building.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2.
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
Required 2 >
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