P3-6 Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio P3-6 Analyzing the Efects of Transactions Using T-Accounts. Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio (AP3-6) L03-4,3-5,3-6 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): 2.070 Account Balance Account Balance Property and equipment (net) $13.894 Receivables 51.549 Retained earnings 9.606 Other current 879 Accounts payable 1.257 Cash 384 Prepaid expenses 104 Spare parts, supplies, and 194 foci Accred expenses payable Other noncurrent liabilities 3.290 Long term notes payable 1.490 Other current liabilities 1.9.39 Other noncurrent 2.552 Additional paid in capital 607 Common stock (50.10 par ale) 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 (the current year); Provided delivery service to customers, who paid $1.390 in cash and owed $24.704 on account. Papr 157 Purchased new equipment costing $3.434, signed a long-term note. + Paid $7864 cash to rent equipment and aircraft, with $3.136 for rent this year and the rest for rent next year. 4 Spent $864 cash to repair facilities and equipment during the year, Collected $24.285 from customers on account Repuid S1S0 on a long term note (ignore interest) lued 20 million additional shares of $0.10 par value stock for $16 (that's $16 million). Paid employees 59.276 for work during the year. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $6.564 cash. Used S6,450 in spare parts supplies, and fuel for the aircraft and equipment during the year Paid 5754 G accounts payable. Ordered Sas in spare parts and supplies. Required 1. Prepare journal entries for each transaction. Use the accountitles that FedEx uses as listed above for balance sheet account effects 2. Prepare Taccounts for the current year from the preceding tist: enter the ending balances from May 31 as the respective beginning balances for June 1 of the current year. You will need additional Taccounts for income statement accounts, enter zero for beginning balances. Post the effects of the transactions in the Taccounts, and compute ending balances. 3. Prepare an unadjusted income statement for the current year ended May 31. 4. Compute the company's net profit margin ratio for the current year ended May 31. Round your answer to two decimal places. What do the results suggest to you about FedEx? P3-6 Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio P3-6 Analyzing the Efects of Transactions Using T-Accounts. Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio (AP3-6) L03-4,3-5,3-6 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): 2.070 Account Balance Account Balance Property and equipment (net) $13.894 Receivables 51.549 Retained earnings 9.606 Other current 879 Accounts payable 1.257 Cash 384 Prepaid expenses 104 Spare parts, supplies, and 194 foci Accred expenses payable Other noncurrent liabilities 3.290 Long term notes payable 1.490 Other current liabilities 1.9.39 Other noncurrent 2.552 Additional paid in capital 607 Common stock (50.10 par ale) 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 (the current year); Provided delivery service to customers, who paid $1.390 in cash and owed $24.704 on account. Papr 157 Purchased new equipment costing $3.434, signed a long-term note. + Paid $7864 cash to rent equipment and aircraft, with $3.136 for rent this year and the rest for rent next year. 4 Spent $864 cash to repair facilities and equipment during the year, Collected $24.285 from customers on account Repuid S1S0 on a long term note (ignore interest) lued 20 million additional shares of $0.10 par value stock for $16 (that's $16 million). Paid employees 59.276 for work during the year. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $6.564 cash. Used S6,450 in spare parts supplies, and fuel for the aircraft and equipment during the year Paid 5754 G accounts payable. Ordered Sas in spare parts and supplies. Required 1. Prepare journal entries for each transaction. Use the accountitles that FedEx uses as listed above for balance sheet account effects 2. Prepare Taccounts for the current year from the preceding tist: enter the ending balances from May 31 as the respective beginning balances for June 1 of the current year. You will need additional Taccounts for income statement accounts, enter zero for beginning balances. Post the effects of the transactions in the Taccounts, and compute ending balances. 3. Prepare an unadjusted income statement for the current year ended May 31. 4. Compute the company's net profit margin ratio for the current year ended May 31. Round your answer to two decimal places. What do the results suggest to you about FedEx