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 Accounts payable Prepaid expenses Accrued expenses payable Long-term notes payable Other noncurrent assets Common stock ($0.10 par value) Balance $18,894 14,606 1,757 358 2,570 Account Receivables Other current assets Cash Spare parts, supplies, and fuel Other noncurrent liabilities Other current liabilities Additional Paid-in Capital Balance $ 2,799 1,129 1,384 894 4,040 2,439 1,357 1,999 3,302 1 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 $13,890 in cash and owed $42,304 on account. b. Purchased new equipment costing $3,934; signed a long-term note. C. Paid $12,864 cash to rent equipment and aircraft, with $6,886 for rent this year and the rest for rent next year. d. Spent $1,364 cash to repair facilities and equipment during the year. e. Collected $39,285 from customers on account. f. Repaid $400 on a long-term note (ignore interest). g. Issued 270 million additional shares of $0.10 par value stock for $41 (that's $41 million). h. Paid employees $15,526 for work during the year. i. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $14,064 cash. j. Used $7,700 in spare parts, supplies, and fuel for the aircraft and equipment during the year. k. Paid $1,284 on accounts payable. 1. Ordered $138 in spare parts and supplies. P3-6 Part 2 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.) Cash Receivables Beg. bal. Beg. bal. End, bal 0 End, bal. Spare Parts, Supplies, and Fuel Prepaid Expenses Beg. bal. Beg. bal. End, bal. 0 End, bal Other Current Assets Property and Equipment (net) Beg. bal. Beg. bal Required information Ena. pai UL Ena. pai Other Current Assets Property and Equipment (net) Beg. bal. Beg. bal. End. bal. 0 End, bal. 0 Other Noncurrent Assets Accounts Payable Beg. bal. Beg. bal. End. bal. 0 End. bal 0 Accrued Expenses Payable Other Current Liabilities Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 Long-Term Notes Payable Other Noncurrent Liabilities Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 Required information Long-Term Notes Payable Other Noncurrent Liabilities Beg. bal Beg. bal. End, bal. 0 End. bal. 0 Common Stock Additional Paid-in Capital Beg. bal. Beg. bal. End, bal. 0 End, bal 0 Retained Earnings Delivery Service Revenue Beg. bal Beg. bal. End. bal. 0 End. bal. 0 Rent Expense Repair Expense Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 Wage Expense Spare Parts, Supplies, and Fuel Expense