Rexerica Inc is an architecture and building company whose competitive edge is specialty projects and innovative designs for commercial buildings. Their regular operations were very successful this year, as they expected with well-established clients and frequent recommendations. This year they also bought land and began building their permanent location, which they hope will exemplify their work. By December 31, 2021, the building was not yet complete to put into service.

Rexerica asked if you would help them account for the following business activity that is not yet represented on their preliminary, partial trial balance they gave you. Please round up to the nearest dollar all calculated amounts.

1. 01/15/2021 - Rexerica bought with cash some land for their new location. Purchase price with all acquisition costs totaled $97,850.

2. 02/03/2021 - The land included remnants of an old, unusable building that needed to be removed for their purposes. They removed the structure for $3,400, completing most of the work by themselves.

3. 03/15/2021 – Rexerica took out a loan for construction of the new building. The terms of that
note are as follows.
o Principal $2,700,000
o Annual interest rate 7%
o Term 180 months

The bank also provided a table of scheduled note payments, which is attached. During 2021, Rexerica paid all payments as scheduled, in the amounts prescribed by that table. For purposes of the year-end financial statements, you may enter one journal entry for the total payments made as of Dec 31, 2021. All interest paid on this note is considered to be costs
incurred during the construction period for the building.

4. Rexerica tracks the depreciation of their equipment outside of their regular accounting system. They gave you a total amount of $453,000 for all of their heavy equipment during 2021. After reviewing their depreciation tables used for calculating their depreciation, you agree that this estimate is reasonable and calculated consistently as done in prior years.

5. During 2021, Rexerica spent $18,000 on oil changes, minor repairs, and typical part replacements for their heavy equipment.

6. 05/31/2021 – Rexerica sold a piece of equipment that was no longer serving their needs.
o Book value at time of sale was $120,000
o Sale price was $95,000

7. As of Dec 31, 2021, $55,680 of sales tax was collected from clients but not yet remitted. Related materials sales totaled $696,000. Related cost of goods sold was $580,000 All sales tax from Jan – Nov, 2021 was already collected and remitted as required and included on the partial trial balance provided. Please create the journal entry to account for the materials sales, sales tax payable, and cash collected for Dec sales.

8. As of Dec 31, 2021, payroll amounts outstanding for the period Dec 1 – Dec 31, 2021 are as follows. All payroll transactions from Jan – Nov, 2021 are already accounted for in the partial trial balance provided.
o Salaries and wages $3,200,000
o FICA – employee responsibility $244,800
o FICA – company responsibility $244,800
o Federal income taxes withheld $960,000
o No state income tax applies
o Net paychecks owed to employees $1,995,200, scheduled to be paid on 01/07/2022,
o Unemployment taxes to be paid by the company $, scheduled to be paid on or before 01/15/2021