What is initial valuation for land building and improvements

Assignment Help Accounting Basics

Reference no: EM131973965

Problem

Samtech manufacturing purchased land and building for $6 million. In addition to the purchase following expenditures were made in connection with the purchase of the land and the building:

Title insurance $27000
Legal fees. $5500
Pro-rated property taxes after the acquisition. $47000
State transfer fees $5100

An independent appraisal estimated the fair values of the land and building if purchased separately at 3.9 million and 2.6 million respectively. Shortly after accusation Centex spent 93,000 to construct a parking lot and $51,000 for landscaping.

Determine the initial valuation of each asset assuming that immediately after acquisitions Samtech demolished the building. demolition costs were $360,000 and a salvaged materials were sold for $6500 in addition Samtech spend $90,000 clearing and grading the land in preparation for the construction of new building.

What is the initial valuation for land, building and land improvements?

Reference no: EM131973965

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