Required information (The following information applies to the questions displayed below.) 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): 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 $ 13,894 Receivables 9,606 Other current assets 1,257 Cash 108 Spare parts, supplies, and fuel 2,070 Other noncurrent liabilities 1,490 Other current liabilities 2,552 Additional Paid-in Capital 1 Balance $ 1,549 879 884 394 3,290 1,939 607 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. b. Purchased new equipment costing $3,434; signed a long-term note. c. Paid $7,864 cash to rent equipment and aircraft, with $3,136 for rent this year and the rest for rent next year. d. Spent $864 cash to repair facilities and equipment during the year. e. Collected $24,285 from customers on account. f. Repaid $150 on a long-term note (ignore interest). g. Issued 20 million additional shares of $0.10 par value stock for $16 (that's $16 million). h. Paid employees $9,276 for work during the year. i. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $6,564 cash. j. Used $6,450 in spare parts, supplies, and fuel for the aircraft and equipment during the year. k. Paid $784 on accounts payable. 1. Ordered $88 in spare parts and supplies. 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 View journal entry worksheet No Transaction General Journal Debit Credit 1 a. 26,097 Delivery service revenue Cash 1,390 24,707 Accounts receivable 2 b. 3,434 Property and equipment Accounts payable 3,434 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. Label each using the letter of the transaction. (Enter your answers in millions, not in dollars.) Cash 884 Beg. bal. (a) Beg. bal. (a) Receivables 1,549 24,704 1,390 End. bal. 23,155 End. bal. 2,274 Spare Parts, Supplies, and Fuel 394 6,564 Prepaid Expenses 108 Beg. bal. (0) Beg. bal. End. bal. 6,958 End. bal. 108 Other Current Assets 879 Property and Equipment (net) 13,894 Beg. bal. Beg. bal. End. bal. 879 End. bal. 13,894 Other Noncurrent Assets Accounts Payable Beg. bal. 2,552 Beg. bal. 1,257 End. bal. 2,552 End. bal. 1,257 Accrued Expenses Payable 2,070 Other Current Liabilities 1,939 Beg. bal. Beg. bal. End. bal. 2,070 End. bal. 1,939 Long-Term Notes Payable 1,490 3,434 Other Noncurrent Liabilities 3,290 Beg. bal. Beg. bal. (b) End. bal. 4,924 End. bal. 3,290 Common Stock Additional Paid-in Capital Beg. bal. Beg. bal. 607 End. bal. End. bal. 607 Delivery Service Revenue Retained Earnings 9,606 Beg. bal. Beg. bal. End. bal. 9,606 End. bal. Rent Expense Repair Expense Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 Wage Expense Spare Parts, Supplies, and Fuel Expense Beg. bal. Beg. bal. End. bal. 0 End. bal. 0 3. Prepare an unadjusted income statement for the current year ended May 31. FEDEX Income Statement (unadjusted) (in millions) 0 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 %
