Question

Samtech Manufacturing purchased land and building for $3 million. In addition to the purchase price, Samtech...

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 contacts $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.
  

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price, Samtech...
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 $ 26,000 Legal fees for drawing the contract 5,000 Pro-rated property taxes for the period after acquisition 46,000 State transfer fees 5,000 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.2 and $1.8 million, respectively. Shortly after acquisition, Samtech spent...
Samtech Manufacturing purchased land and building for $3 million. In addition to the purchase price, Samtech...
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 $ 35,000 Legal fees for drawing the contract 9,500 Pro-rated property taxes for the period after acquisition 55,000 State transfer fees 5,900 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.6 and $1.2 million, respectively. Shortly after acquisition, Samtech spent...
Samtech Manufacturing purchased land and building for $3 million. In addition to the purchase price, Samtech...
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 $ 36,000 Legal fees for drawing the contract 10,000 Pro-rated property taxes for the period after acquisition 56,000 State transfer fees 6,000 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3 and $1 million, respectively. Shortly after acquisition, Samtech spent...
An independent appraisal estimated the fair values of the land and building, if purchased separately, at...
An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3 and $1 million, respectively. Shortly after acquisition, Samtech spent $83,000 to construct a parking lot and $41,000 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 $260,000 and the salvaged materials were sold for $6,500. In...
An independent appraisal estimated the fair values of the land and building, if purchased separately, at...
An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.5 and $1.5 million, respectively. Shortly after acquisition, Samtech spent $97,000 to construct a parking lot and $55,000 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 $400,000 and the salvaged materials were sold for $8,500. In...
Fullerton Waste Management purchased land and a warehouse for $640,000. In addition to the purchase price,...
Fullerton Waste Management purchased land and a warehouse for $640,000. In addition to the purchase price, Fullerton made the following expenditures related to the acquisition: broker’s commission, $34,000; title insurance, $5,000; miscellaneous closing costs, $8,000. The warehouse was immediately demolished at a cost of $22,000 in anticipation of the building of a new warehouse. Determine the amounts Fullerton should capitalize as the cost of the land and the building. Capitalized cost of land Capitalized cost of building
Teradene Corporation purchased land as a factory site and contracted with Maxtor Construction to construct a...
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: Purchase price of the land $ 1,290,000 Demolition and removal of old building 89,000 Clearing and grading the land before construction 195,000 Various closing costs in connection with acquiring the land 51,000 Architect's fee for the plans for the new building 59,000 Payments to Maxtor...
On February 1, 2020, Crane Company purchased a parcel of land as a factory site for...
On February 1, 2020, Crane Company purchased a parcel of land as a factory site for $318000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2020. Costs incurred during this period are listed below: Demolition of old building $ 21000 Architect's fees 36000 Legal fees for title investigation and purchase contract 5300 Construction costs 1392000 (Salvaged materials resulting from demolition were sold for $10800.) Crane should record...
On February 1, 2020, Coronado Industries purchased a parcel of land as a factory site for...
On February 1, 2020, Coronado Industries purchased a parcel of land as a factory site for $325000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2020. Costs incurred during this period are listed below: Demolition of old building $ 21300 Architect's fees 33900 Legal fees for title investigation and purchase contract 5400 Construction costs 1379000 (Salvaged materials resulting from demolition were sold for $9600.) Coronado should record...
Fullerton Waste Management purchased land and a warehouse for $710,000. In addition to the purchase price,...
Fullerton Waste Management purchased land and a warehouse for $710,000. In addition to the purchase price, Fullerton made the following expenditures related to the acquisition: broker’s commission, $41,000; title insurance, $8,500; miscellaneous closing costs, $11,500. Assume that Fullerton decides to use the warehouse rather than demolish it. An independent appraisal estimates the fair values of the land and warehouse at $486,000 and $324,000, respectively. Determine the amounts Fullerton should capitalize as the cost of the land and the building. Capitalized...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT