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 Effects of Transactions Using T-Accounts. Preparing an Income Statement, and Evaluating the Net Profle Margin Ratio AP3-6) L03-4,3-5,36 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 price fiscal year SLS Property and equipment (net) $13.894 Retained earnings Accounts payable 1.257 Prepaid expenses 00 Receivables Other current assets Cash Spare parts, supplies, and 394 1999 O2 2,552 1 Accrued expenses 2.070 Other noncurrent liabilities 2280 Longtermes payable Other currenties Other concurrentes Additional pidin capital Common stock (50.16 per value) 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 $1.390 in cash and owed $24.704 on account A Purchased new equipment costing $3,434; signed a long-term note Paid $7.864 cash to rent equipment and aircraft, with $3,136 for rent this year and the rest for rent next year. Spent $864 cash to repair facilities and equipment during the year & Collected $24.285 from customers on account Repaid $150 on a long-term note (tenore interest) & Isued 20 million additional shares of $0.10 par value stock for $16 (that's $16 million) A Paid employees $9.276 for work during the year Purchased spare parts, supplies, and fuel for the aircraft and equipment for $6.564 cash. Used $6.450 in spare parts, supplies, and fuel for the alteraft and equipment during the year. . Paid $784 on accounts payable. Ordered $88 in spare parts and supplies. Required 1. Prepare journal entries for each transaction. Use the account titles that FedEx uses as listed above for balance sheet account effects 2. Prepare Taccounts for the current year from the preceding list, enter the ending balatices from May 31 as the respective beginning bulances for June 1 of the current year. You will need additional accounts 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 Effects of Transactions Using T-Accounts. Preparing an Income Statement, and Evaluating the Net Profle Margin Ratio AP3-6) L03-4,3-5,36 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 price fiscal year SLS Property and equipment (net) $13.894 Retained earnings Accounts payable 1.257 Prepaid expenses 00 Receivables Other current assets Cash Spare parts, supplies, and 394 1999 O2 2,552 1 Accrued expenses 2.070 Other noncurrent liabilities 2280 Longtermes payable Other currenties Other concurrentes Additional pidin capital Common stock (50.16 per value) 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 $1.390 in cash and owed $24.704 on account A Purchased new equipment costing $3,434; signed a long-term note Paid $7.864 cash to rent equipment and aircraft, with $3,136 for rent this year and the rest for rent next year. Spent $864 cash to repair facilities and equipment during the year & Collected $24.285 from customers on account Repaid $150 on a long-term note (tenore interest) & Isued 20 million additional shares of $0.10 par value stock for $16 (that's $16 million) A Paid employees $9.276 for work during the year Purchased spare parts, supplies, and fuel for the aircraft and equipment for $6.564 cash. Used $6.450 in spare parts, supplies, and fuel for the alteraft and equipment during the year. . Paid $784 on accounts payable. Ordered $88 in spare parts and supplies. Required 1. Prepare journal entries for each transaction. Use the account titles that FedEx uses as listed above for balance sheet account effects 2. Prepare Taccounts for the current year from the preceding list, enter the ending balatices from May 31 as the respective beginning bulances for June 1 of the current year. You will need additional accounts 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