Following are several account balances (in millions of dollars) from a recent FedEx annual report, followed by
Question:
Following are several account balances (in millions of dollars) from a recent FedEx annual report, followed by several typical transactions. Assume that the following are account balances on June 30, 2009:
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These accounts are not necessarily in good order and have normal debit or credit balances. The following transactions (in millions of dollars) occurred the next year ending June 30, 2010:
a. Provided delivery service to customers, receiving $7,200 in accounts receivable and $600 in cash.
b. Purchased new equipment costing $816; signed a long-term note.
c. Paid $744 cash to rent equipment and aircraft, with $648 for rental this year and the rest for rent next year.
d. Spent $396 cash to maintain and repair facilities and equipment during the year.
e. Collected $6,524 from customers on account.
f. Borrowed $900 by signing a long-term note.
g. Issued additional stock for $240.
h. Paid employees $3,804 during the year.
i. Purchased for cash and used $492 in fuel for the aircraft and equipment during the year.
j. Paid $384 on accounts payable.
k. Ordered $72 in spare parts and supplies.
Required:
1. Prepare T-accounts for June 30, 2009, from the preceding list; enter the respective beginning balances.
You will need additional T-accounts for income statement accounts; enter zero balances.
2. For each transaction, record the 2010 effects in the T-accounts. Label each using the letter of the transaction. Compute ending balances.
3. Prepare an income statement, statement of retained earnings, balance sheet, and statement of cash flows in good form for June 30, 2010.
4. Compute the company's total asset turnover ratio for the year ended June 30, 2010. What does it suggest to you aboutFedEx?
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
Step by Step Answer:
Req 1 and 2 ASSETS Cash Receivables Spare Parts Supplies and Fuel 155 a 600 e 6524 f 900 g 240 744 c 396 d 3804 h 492 i 384 j 923 a 7200 6524 e 164 2599 1599 164 Prepaid Expenses Other Assets Flight a...View the full answer
