! Required information P3-6 (Algo) Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio L03-4, 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 Balance Account Balance Property and equipment (net) $ 18,294 Receivables $2,649 Retained earnings 14,006 Other current assets 1,099 Accounts payable 1,697 Cash 1,324 Prepaid expenses 328 Spare parts, supplies, and fuel Accrued expenses payable 2,510 Other noncurrent liabilities 3,950 Long-term notes payable 1,930 Other current liabilities 2,379 Other noncurrent assets 3,212 Additional Paid-in Capital 1,267 Common stock ($0.10 par value) 836 3 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 $12,390 in cash and owed $39,904 on account. b. Purchased new equipment costing $3,874; signed a long-term note. c. Paid $12,264 cash to rent equipment and aircraft, with $6,436 for rent this year and the rest for rent next year. d. Spent $1,304 cash to repair facilities and equipment during the year. e. Collected $37,485 from customers on account. f. Repaid $370 on a long-term note (ignore interest). g. Issued 240 million additional shares of $0.10 par value stock for $38 (that's $38 million). h. Paid employees $14,776 for work during the year. i. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $13,164 cash. j. Used $7,550 in spare parts, supplies, and fuel for the aircraft and equipment during the year. k. Paid $1,224 on accounts payable. 1. Ordered $132 in spare parts and supplies. P3-6 Part 1 Required: 1. Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter amounts in millions, not dollars.) View transaction list Journal entry worksheet Provided delivery service to customers, who paid $12,390 in cash and owed $39,904 on account. Note: Enter debits before credits. General Journal Debit Credit Transaction a. Record entry Clear entry View general journal 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. End. bal. 0 End. bal. 0 Other Noncurrent Assets Accounts Payable Beg. bal. Beg. bal. End. bal. End. bal. Accrued Expenses Payable Other Current Liabilities Beg. bal. Beg. bal. End. bal. End. bal. 0 Long-Term Notes Payable Other Noncurrent Liabilities Beg. bal. Beg. bal. End. bal. End. bal. 0 Common Stock Additional Paid-in Capital Beg. bal. Beg. bal. End. bal. End. bal. 0 Retained Earnings Delivery Service Revenue Beg. bal. Beg. bal. End. bal. End. bal. Rent Expense Repair Expense Rent Expense Repair Expense Beg. bal. Beg. bal. End. bal. End. bal. Wage Expense Spare Parts, Supplies, and Fuel Expense Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 P3-6 Part 3 3. Prepare an unadjusted income statement for the current year ended May 31. StateEx Income Statement (unadjusted) (in millions) 0 P3-6 Part 4 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 1%