Early in its fiscal year ending December 31, 2013, San Antonio Outfitters finalized plans to expand operations. The first stage was completed on April 30th with the purchase of a tract of land on the outskirts of the city. The land and existing building were purchased for $800,000. San Antonio paid $200,000 and signed a noninterest-bearing note requiring the company to pay the remaining $600,000 on April 30, 2015. An interest rate of 8% properly reflects the time value of money for this type of loan agreement. Title search, insurance, and other closing costs totaling $20,000 were paid at closing.

During April, the old building was demolished at a cost of $70,000, and an additional $50,000 was paid to clear and grade the land. Construction of a new building began on May 1 and was completed on October 29. Construction expenditures were as follows:

San Antonio borrowed $3,000,000 at 8% on May 1 to help finance construction. This loan, plus interest, will be paid in 2014.

In November, the company purchased 10 identical pieces of equipment and office furniture and fixtures for a lump-sum price of $600,000 on account. The fair values of the equipment and the furniture and fixtures were $455,000 and $245,000, respectively.

In December, San Antonio paid a contractor $285,000 for the construction of parking lots and for landscaping.

Below is the trial balance for San Antonio Outfitters as of March 31.

SAN ANTONIO OUTFITTERS

Trial Balance March 31, 2013

Debit Credit

Cash .......................................................................................... $3,394,380

Accounts receivable ............................................................... 2,129,500

Prepaid insurance ................................................................... 42,300

Office equipment .................................................................... 119,300

Accumulated Depreciation, Office Equipment .................. $11,750

Inventory .................................................................................	2,104,000
Building ...................................................................................	100,000
Land..........................................................................................	720,000
Accounts payable ...................................................................		$ 104,410
Notespayable..........................................................................		600,000
San Antonio, Capital ..............................................................		2,541,700
San Antonio, Withdrawals ....................................................	10,450
Revenue ...................................................................................		6,144,100
Wages expense ........................................................................	654,500
Depreciation Expense, Office Equipment ...........................	4,250
Equipment rental expense.....................................................	71,410
Office Supplies Expense ........................................................	7,500
Advertising expense...............................................................	32,400
Repairs expense ......................................................................	11,970
Totals ........................................................................................	$9,401,960	$9,401,960

Calculation of Purchase price of land Amount

Cash Paid 200000

Value of Note 600000

P.V of note for n = 2 & I =8% 0.85734

P.V of note Payment 514404

Total Purchase Price 714404

Add: Closing costs 20000

Removal cost of Old Building 70000

Clearing & Grading cost of land 50000

Total Value of Land 854404

Building

Average accumulated expenditures;

31-May 1200000 * 5/ 6 1000000

30-Jul 1500000*3/6 750000

1-Sep 900000*2/6 300000

1-Oct 1800000*1/6 300000

Total Average Accumulated expenditure 2350000

Interest capitalized 94000

Total Construction Expenditure 5400000 (1200000+1500000+900000+1800000)

Add Interest Capitalized 94000

Total Cost of Building 5494000

Land Improvements

Parking Lot & Landscaping 285000

Fair value % of fair value Initial valuation

Equipment 455000 65.00% 390000

Furniture & Fixture 245000 35.00% 210000

Total 700000 600000

Interest expense

Note issued to Purchase land & Building 30864 Discount/Interest expense for 2013

Construction Loan 160000 Interest on construction loan for 2013

Total interest 190864

Less Interest capitalized -94000

Interest expense 96864

Where do these categories fit into the spreadsheet provided?

Name San Antonio Outfitters Land Account 12/31/XXXX Totals San Antonio Outfitters Capitalized Cost of Ofifce Building 12/31/XXXX Totals San Antonio Outfitters Schedule of Interest Expense 12/31/XXXX Totals Lump Sum Purchase San Antonio Outfitters Land Improvements 12/31/XXXX Parking lot and landscaping se ers s $285,000