Samtech Manufacturing puchased land building for $4 million. In addition to the purchase price, Samtech made made the following expenditures in connection with the purchase of the land and building:
Title insurance $22000 legal fees for drawing the contract $8000 pro-rated taxes for the period after acquisition $42000 state transfer fees $4600. An independent appraisal estimated the fair values of the land and buiding if purchased separately at $1 and $4 million respectively. Shortly after acquisition, Samtech spent $88000 to construct a parking lot and $46000 for landscaping. What is the initial valuation of the land? What is the initial valuation of the building?