P3-6 (Algo) Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Statement, and Evaluating the...

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P3-6 (Algo) Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio LO3-4, 3-5, 3-6 [The following information applies to the questions displayed below.] Following are account balances (in millions of dollars) from a recent StateEx annual report, followed by several typical transactions. Assume that the following are account balances on May 31 (end of the prior fiscal year): Account Property and equipment (net) Retained earnings Balance $ 16,694 12,406 Account Balance Receivables $2,249 Accounts payable 1,537 Other current assets Cash 1,019 1,164 Prepaid expenses 248 Spare parts, supplies, and fuel 678 Accrued expenses payable 2,350 Other noncurrent liabilities 3,710 Long-term notes payable 1,770 Other current liabilities 2,219 Other noncurrent assets 2,972 Additional Paid-in Capital 1,027 Common stock ($0.10 par value) 5 These accounts are not necessarily in good order and have normal debit or credit balances. Assume the following transactions (in millions, except for par value) occurred the next fiscal year beginning June 1 (the current year): a. Provided delivery service to customers, who paid $8,390 in cash and owed $33,504 on account. b. Purchased new equipment costing $3,714; signed a long-term note. c. Paid $10,664 cash to rent equipment and aircraft, with $5,236 for rent this year and the rest for rent next year. d. Spent $1,144 cash to repair facilities and equipment during the year. e. Collected $32,685 from customers on account. f. Repaid $290 on a long-term note (ignore interest). g. Issued 160 million additional shares of $0.10 par value stock for $30 (that's $30 million). h. Paid employees $12,776 for work during the year. i. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $10,764 cash. j. Used $7,150 in spare parts, supplies, and fuel for the aircraft and equipment during the year. k. Paid $1,064 on accounts payable. I. Ordered $116 in spare parts and supplies. 2. Prepare T-accounts for the current year from the preceding list; enter the ending balances from May 31 as the respective beginning balances for June 1 of the current year. For each transaction, record the current year's transaction effects in the T-accounts. Label each using the letter of the transaction. (Enter your answers in millions, not in dollars.) Beg. bal. End. bal. Cash 0 Beg. bal. Receivables End. bal. 0 Spare Parts, Supplies, and Fuel Prepaid Expenses Beg. bal. Beg. bal. End. bal. 0 End. bal. Other Current Assets Beg. bal. Beg. bal. End. bal. 0 0 Property and Equipment (net) End. bal. 0 Other Noncurrent Assets Beg. bal. Beg. bal. End. bal. 0 End. bal. Accounts Payable Accrued Expenses Payable Other Current Liabilities Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 0 Long-Term Notes Payable Other Noncurrent Liabilities Beg. bal. Beg. bal. End. bal. Common Stock Beg. bal. End. bal. 0 End. bal. 0 Additional Paid-in Capital Beg. bal. End. bal. 0 Retained Earnings Beg. bal. End. bal. Rent Expense Beg. bal. End. bal. 0 Wage Expense Beg. bal. Beg. bal. 0 End. bal. Delivery Service Revenue Repair Expense Beg. bal. End. bal. 0 0 Spare Parts, Supplies, and Fuel Expense Beg. bal. End. bal. 0 End. bal. 0 3. Prepare an unadjusted income statement for the current year ended May 31. StateEx Income Statement (unadjusted) (in millions) 4. Compute the company's net profit margin ratio for the current year ended May 31. (Round your percentage answer to 1 decimal place (i.e., 32.1)). Net profit margin ratio % P3-6 (Algo) Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio LO3-4, 3-5, 3-6 [The following information applies to the questions displayed below.] Following are account balances (in millions of dollars) from a recent StateEx annual report, followed by several typical transactions. Assume that the following are account balances on May 31 (end of the prior fiscal year): Account Property and equipment (net) Retained earnings Balance $ 16,694 12,406 Account Balance Receivables $2,249 Accounts payable 1,537 Other current assets Cash 1,019 1,164 Prepaid expenses 248 Spare parts, supplies, and fuel 678 Accrued expenses payable 2,350 Other noncurrent liabilities 3,710 Long-term notes payable 1,770 Other current liabilities 2,219 Other noncurrent assets 2,972 Additional Paid-in Capital 1,027 Common stock ($0.10 par value) 5 These accounts are not necessarily in good order and have normal debit or credit balances. Assume the following transactions (in millions, except for par value) occurred the next fiscal year beginning June 1 (the current year): a. Provided delivery service to customers, who paid $8,390 in cash and owed $33,504 on account. b. Purchased new equipment costing $3,714; signed a long-term note. c. Paid $10,664 cash to rent equipment and aircraft, with $5,236 for rent this year and the rest for rent next year. d. Spent $1,144 cash to repair facilities and equipment during the year. e. Collected $32,685 from customers on account. f. Repaid $290 on a long-term note (ignore interest). g. Issued 160 million additional shares of $0.10 par value stock for $30 (that's $30 million). h. Paid employees $12,776 for work during the year. i. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $10,764 cash. j. Used $7,150 in spare parts, supplies, and fuel for the aircraft and equipment during the year. k. Paid $1,064 on accounts payable. I. Ordered $116 in spare parts and supplies. 2. Prepare T-accounts for the current year from the preceding list; enter the ending balances from May 31 as the respective beginning balances for June 1 of the current year. For each transaction, record the current year's transaction effects in the T-accounts. Label each using the letter of the transaction. (Enter your answers in millions, not in dollars.) Beg. bal. End. bal. Cash 0 Beg. bal. Receivables End. bal. 0 Spare Parts, Supplies, and Fuel Prepaid Expenses Beg. bal. Beg. bal. End. bal. 0 End. bal. Other Current Assets Beg. bal. Beg. bal. End. bal. 0 0 Property and Equipment (net) End. bal. 0 Other Noncurrent Assets Beg. bal. Beg. bal. End. bal. 0 End. bal. Accounts Payable Accrued Expenses Payable Other Current Liabilities Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 0 Long-Term Notes Payable Other Noncurrent Liabilities Beg. bal. Beg. bal. End. bal. Common Stock Beg. bal. End. bal. 0 End. bal. 0 Additional Paid-in Capital Beg. bal. End. bal. 0 Retained Earnings Beg. bal. End. bal. Rent Expense Beg. bal. End. bal. 0 Wage Expense Beg. bal. Beg. bal. 0 End. bal. Delivery Service Revenue Repair Expense Beg. bal. End. bal. 0 0 Spare Parts, Supplies, and Fuel Expense Beg. bal. End. bal. 0 End. bal. 0 3. Prepare an unadjusted income statement for the current year ended May 31. StateEx Income Statement (unadjusted) (in millions) 4. Compute the company's net profit margin ratio for the current year ended May 31. (Round your percentage answer to 1 decimal place (i.e., 32.1)). Net profit margin ratio %