Samtech Manufacturing purchased land and a 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: $17,000
Legal fees for drawing the contract: $5,500
Pro-rated property taxes for the period after acquisition: $37,000
State transfer fees: $4,100
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