Question - Teradene Corporation purchased land as a factory site and contracted with Maxtor Construction to construct a factory. Teradene made the following expenditures related to the acquisition of the land, building, and equipment for the factory: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):
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Purchase price of the land
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$1,360,000
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Demolition and removal of old building
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96,000
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Clearing and grading the land before construction
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230,000
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Various closing costs in connection with acquiring the land
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58,000
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Architect's fee for the plans for the new building
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66,000
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Payments to Maxtor for building construction
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3,410,000
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Equipment purchased
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940,000
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Freight charges on equipment
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48,000
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Trees, plants, and other landscaping
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61,000
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Installation of a sprinkler system for the landscaping
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6,600
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Cost to build special platforms and install wiring for the equipment
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28,000
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Cost of trial runs to ensure proper installation of the equipment
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8,600
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Fire and theft insurance on the factory for the first year of use
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40,000
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In addition to the above expenditures, Teradene purchased four forklifts from Caterpillar. In payment, Teradene paid $32,000 cash and signed a noninterest-bearing note requiring the payment of $86,000 in one year. An interest rate of 9% properly reflects the time value of money for this type of loan.
Required: Determine the initial valuation of each of the assets Teradene acquired in the above transactions.