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	$	23,000
Legal fees for drawing the contract		8,500
Pro-rated property taxes for the period after acquisition		43,000
State transfer fees		4,700

An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3 and $2 million, respectively. Shortly after acquisition, Samtech spent $89,000 to construct a parking lot and $47,000 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 $320,000 and the salvaged materials were sold for $9,500. In addition, Samtech spent $86,000 clearing and grading the land in preparation for the construction of a new building.

• Required 1

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

• Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $320,000 and the salvaged materials were sold for $9,500. In addition, Samtech spent $86,000 clearing and grading the land in preparation for the construction of a new building. (Enter your answers in whole dollars.)

  Assets	Initial Valuation
  Land
  Building
  Land improvements