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Required information [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 (50.19 par value) Balance Account $15,494 Receivables 11,206 Other current assets 1,417 Cash 188 Spare parts, supplies, and fuel 2,230 Other noncurrent liabilities 1,650 Other current liabilities 2,792 Additional Paid-in Capital Balance $1,949 959 1,044 557 3,530 2,099 847 These accounts are not necessarily in good order and have normal debitor 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 $5,390 in cash and owed $28,704 on account b. Purchased new equipment costing $3,594; signed a long-term note. c. Paid $9,464 cash to rent equipment and aircraft, with $4,336 for rent this year and the rest for rent next year. d. Spent $1,024 cash to repair facilities and equipment during the year. e. Collected $29,085 from customers on account f. Repaid $230 on a long-term note (ignore interest). g. Issued 100 million additional shares of $0.10 par value stock for $24 (that's $24 million). h. Paid employees $11,276 for work during the year 1. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $8.964 cash. J. Used $6,850 in spare parts, supplies, and fuel for the aircraft and equipment during the year. k. Paid $944 on accounts payable. 1. Ordered $104 in spare parts and supplies. 3. Prepare an unadiusted income statement for the current vear ended May 21

Answer 1

Solution-

StateEx

Income Statement (unadjusted)

For the Year Ended May 31(Current Year)

(in millions)

Revenues:
Delivery service revenue		$34094
Expenses:
Rent expense	$4336
Repairs expense	$1024
Wages expense	$11276
Spare parts,supplies, and fuel expense	$6850
Total Expenses		$23486
Net income		$10608