Account

Balance

Property and equipment (net)

$15,543

Retained earnings

12,716

Accounts payable

1,702

Prepaid expenses

329

Accrued expenses payable

1,894

Long-term notes payable

1,667

Other noncurrent assets

3,557

Common stock ($0.10 par value)

32

Receivables

4,581

Other current assets

610

Cash

2,328

Spare parts, supplies, and fuel

437

Other noncurrent liabilities

5,616

Other current liabilities

1,286

Additional Paid-in Capital

2,472

[The following information applies to the questions displayed below.] Following are 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 May 31 (end of the prior fiscal year): Account Balance Property and equipment (net) $ 15,543 Retained earnings 12,716 Accounts payable 1,702 Prepaid expenses 329 Accrued expenses payable 1,894 Long-term notes payable 1,667 Other noncurrent assets 3,557 Common stock ($0.10 par value) 32 Receivables 4,581 Other current assets 610 Cash 2,328 Spare parts, supplies, and fuel 437 Other noncurrent liabilities 5,616 Other current liabilities 1,286 Additional Paid-in Capital 2,472 These accounts are not necessarily in good order and have normal debit or credit balances. Assume the following transactions (in millions) occurred the next fiscal year beginning June 1 (the current year): Provided delivery service to customers, receiving $21,704 in accounts receivable and $17,600 in cash. Purchased new equipment costing $3,434; signed a long-term note. Paid $13,864 cash to rent equipment and aircraft, with $10,136 for rental this year and the rest for rental next year. Spent $3,864 cash to maintain and repair facilities and equipment during the year. Collected $24,285 from customers on account. Repaid $350 on a long-term note (ignore interest). Issued 20 shares of additional stock for $16. Paid employees $15,276 during the year. Purchased for cash and used $8,564 in fuel for the aircraft and equipment during the year. Paid $784 on accounts payable. Ordered $88 in spare parts and supplies. 1. & 2. Prepare T-accounts for May 31 of the current year from the preceding list; enter the respective beginning balances. For each transaction, record the current year's transaction effects in the T-accounts. Label each using the letter of the transaction. Compute ending balances. (Enter your answers in millions, not in dollars.) eBook & Resources eBook: Apply transaction analysis to examine and record the effects of operating activities on the financial statements. eBook: Compute and interpret the net profit margin ratio. eBook: Prepare a classified income statement 3. Prepare an income statement for the current year ended May 31. eBook: Prepare a classified income statement. 4. Compute the company's net profit margin ratio for the current year ended May 31. (Round your percentage answers to 1 decimal place (i.e., 32.1))