Question
Following are selected account balances (in millions of dollars) from a recent UPS annual report, followed by several typical transactions. Assume that the following are
Following are selected account balances (in millions of dollars) from a recent UPS annual report, followed by several typical transactions. Assume that the following are account balances on December 31 (end of the prior fiscal year):
Account | Balance | Account | Balance |
---|---|---|---|
Property, plant, and equipment (net) | $15,494 | Receivables | $1,949 |
Retained earnings | 11,206 | Other current assets | 959 |
Accounts payable | 1,417 | Cash | 1,044 |
Prepaid expenses | 188 | Spare parts, supplies, and fuel | 557 |
Accrued expenses payable | 2,230 | Other non-current liabilities | 3,530 |
Long-term notes payable | 1,650 | Other current liabilities | 2,099 |
Other non-current assets | 2,792 | Additional Paid-in Capital | 847 |
Common stock ($0.01 par value) | 4 |
These accounts are not necessarily in good order and have normal debit or credit balances. (Note: Because these are not all of UPS's accounts, these will not balance in a trial balance.) Assume the following transactions (in millions, except for par value) occurred the next fiscal year beginning January 1 (the current year):
- Provided delivery service to customers, who paid $5,390 in cash and owed $28,704 on account.
- Purchased new PPE costing $3,594; signed a long-term note.
- Paid $9,464 cash to rent equipment and aircraft, with $4,336 for rent this year and the rest for rent next year (a prepaid expense).
- Spent $1,024 cash to repair facilities and equipment during the year.
- Collected $29,085 from customers on account.
- Repaid $230 on a long-term note (ignore interest).
- Issued 200 million additional shares of $0.01 par value stock for $24 (thats $24 million).
- Paid employees $11,276 for work during the year.
- Purchased spare parts, supplies, and fuel for the aircraft and equipment for$8,964 cash.
- Used $6,850 in spare parts, supplies, and fuel for the aircraft and equipment during the year.
- Paid $944 on accounts payable.
- Ordered $104 in spare parts and supplies.
Required:
- Prepare journal entries for each transaction.
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