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:

Title insurance	$	25,000
Legal fees for drawing the contract		9,500
Pro-rated property taxes for the period after acquisition		45,000
State transfer fees		4,900

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 $91,000 to construct a parking lot and $49,000 for landscaping.

Required:

1.

Determine the initial valuation of each asset Samtech acquired in these transactions. (Enter your answers in whole dollars.)

Assets	Initial Valuation
Land	$2,423,640
Building	$1,615,760
Land improvements

2.

Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $340,000 and the salvaged materials were sold for $5,500. In addition, Samtech spent $88,000 clearing and grading the land in preparation for the construction of a new building. (Enter your answers in whole dollars.)

Assets	Initial Valuation
Land	$4,461,900
Building	$0
Land improvements