Problem
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:
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Title insurance
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$16,000
|
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Legal fees for drawing the contract
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5,000
|
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Pro-rated property taxes for the period after the acquisition
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36,000
|
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State transfer fees
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4,000
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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.
Task
Determine the initial valuation of each asset Samtech acquired in these transactions