Question

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 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. I. Ordered $88 in spare parts and supplies. 3. Prepare an unadjusted income statement for the current year ended May 31.

Answer 1

Unadjusted Income Statement for FedEx for the current year ended May 31 is as prepared below:

FedEx
Income Statement
For the Year Ended May 31
Particulars	Amount ($)	Amount ($)
Deliver Service Revenue		26,094
Less:
Rent Expense	3,136
Repair Expense	864
Salaries Expense	9,276
Supplies Expense	6,450
Total Operating Expenses		19,726
Operating Income		6,368

Transaction number a, c, d, h and j are impacting the Income Statement.

Rest all transactions will impact Balance Sheet.