Business, 31.03.2020 02:58 TrueKing184

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 $ 16,000 Legal fees for drawing the contract 5,000 Pro-rated property taxes for the period after acquisition 36,000 State transfer fees 4,000 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.3 and $1.1 million, respectively. Shortly after acquisition, Samtech spent $82,000 to construct a parking lot and $40,000 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 $250,000 and the salvaged materials were sold for $6,000. In addition, Samtech spent $86,000 clearing and grading the land in preparation for the construction of a new building.

Answers: 1

Show answers

Answers

Answer from: robertcoe426

Answer 1 ) The initial valuation of each asset Samtech acquired in these transactions:

Value to be capitalized = $4,000,000 + $16,000 + $5,000 + $4,000 Value to be capitalized = $4,025,000

Assets Fair value Total percentage Proportional value

1.Land $3,300,000 75% $2,475,000

2.Building $1,100,000 25% $275,000

Total $4,400,000 100 % $2,750,000

Working Notes :

For Land = ($3,300,000 ÷ $4,400,000) = 75% For Building = ($1,100,000 ÷ $4,400,000) = 25% Land Improvement = $82,000 + $40,000 = $122,000

Answer 2) The initial valuation of each asset, assuming that immediately after acquisition that Samtech demolished the building:

Entries Amounts

Purchase cost $4,000,000 Add: Title insurance $16,000 Add: Legal fees for drawing the contract $5,000 Add: State transfer fee $4,000 Add: Demolition cost $250,000 Add: Cleaning and grading cost $86,000 Less: Salvage material $6,000

Total Cost of land $4,355,000

Land Improvement = $82,000 + $40,000 = $122,000

Know more :

link

Answer from: 1991987

The calculation is shown below:-

Explanation:

1. Value to be capitalized $4,000,000 + $16,000 + $5,000 + $4,000

= $4,025,000

Assets Fair value Total percentage Proportional value

Land $3,300,000 75% $2,475,000

Building $1,100,000 25% $275,000

total $4,400,000 $2,750,000

Working Note :-

For Land = ($3,300,000 ÷ $4,400,000) = 75%

For Building = ($1,100,000 ÷ $4,400,000) = 25%

Land Improvement = $82,000 + $40,000

= $122,000

2. Purchase cost $4,000,000

Add: Title insurance $16,000

Add: Legal fees for drawing the contract $5,000

Add: State transfer fee $4,000

Add: Demolition cost $250,000

Add: Cleaning and grading cost $86,000

Less: Salvage material $6,000

Cost of land $4,355,000

Land Improvement = $82,000 + $40,000

= $122,000

Answer from: Quest

B. false hope it ! : )

Answer from: Quest

government control and resources

Another question on Business

Business, 22.06.2019 01:30

The gomez company, a merchandising firm, has budgeted its activity for december according to the following information: • sales at $500,000, all for cash. • merchandise inventory on november 30 was $250,000. • the cash balance at december 1 was $20,000. • selling and administrative expenses are budgeted at $50,000 for december and are paid for in cash. • budgeted depreciation for december is $30,000. • the planned merchandise inventory on december 31 is $260,000. • the cost of goods sold represents 75% of the selling price. • all purchases are paid for in cash. the budgeted cash disbursements for december are:

Answers: 3

Answer

Business, 22.06.2019 10:20

What two things do you consider when evaluating the time value of money

Answers: 1

Answer

Business, 22.06.2019 20:50

Barbara flynn is in charge of maintaining hospital supplies at general hospital. during the past year, the mean lead time demand for bandage bx-5 was 65 (and was normally distributed). furthermore, the standard deviation for bx-5 was 6. ms. flynn would like to maintain a 90% service level.refer to the standard normal table for z-values.a) what safety stock level do you recommend for bx-5? safety stock=)what is the appropriate reorder point? reorder point=

Answers: 1

Answer

Business, 23.06.2019 00:50

On december 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: accounts receivable, debit balance of $97,900; allowance for doubtful accounts, credit balance of $1,031. what amount should be debited to bad debts expense, assuming 6% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible?

Answers: 1

Answer

You know the right answer?

Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price,...

Questions