Required information 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 Account $17,094 Receivables 12,806 Other current assets 1,577 Cash 268 Spare parts, supplies, and fuel 2,390 other noncurrent liabilities 1,810 other current liabilities 3,032 Additional Paid-in Capital 2 Balance $ 2,349 1,039 1,204 715 3, 770 2,259 1,087 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 $9,390 in cash and owed $35,104 An Palint 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 $9,390 in cash and owed $35,104 on account b. Purchased new equipment costing $3,754; signed a long-term note. c. Paid $11,064 cash to rent equipment and aircraft, with $5,536 for rent this year and the rest for rent next year. d. Spent $1,184 cash to repair facilities and equipment during the year. e. Collected $33,885 from customers on account. f. Repaid $310 on a long-term note (ignore interest). g. Issued 180 million additional shares of $0.10 par value stock for $32 (that's $32 million) h. Paid employees $13,276 for work during the year. i. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $11,364 cash. j. Used $7,250 in spare parts, supplies, and fuel for the aircraft and equipment during the year. k. Paid $1,104 on accounts payable. 1. Ordered $120 in spare parts and supplies. 3. Prepare an unadjusted income statement for the current year ended May 31. State Ex Income Statement (unadjusted) (in millions) 0 P3-6 Part 4 s 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 % P3-7 Part 2 2. For the transactions below, indicate how the transactions will affect the statement of cash flows. Cash outflows should be entered as negative amounts. The first transaction is provided as an example. (If there is no effect on the statement of cash flows, select "No effect". Enter your answers in thousands, not in dollars. Cash outflows should be indicated with a minus sign.) Transaction Type of Activity a. Operating b. Effect on Cash Flows 651,042 C. d. e. f. g h. i. j
