Question

Following are account balances (in millions of dollars) from a recent StateEx annual report, followed by several typic 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 836 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) 3 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 $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. 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.

Answer 1

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

StateEx
Income Statement
For the Year Ended May 31
Particulars	Amount ($)	Amount ($)
Deliver Service Revenue		52,294
Less:
Rent Expense	6,436
Repair Expense	1,304
Salaries Expense	14,776
Supplies Expense	7,550
Total Operating Expenses		30,066
Operating Income		22,228

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

Rest all transactions will impact Balance Sheet.