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Tutorial 2 Question P3-6. T-accounts for May 31, 2011.
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Transcript of Tutorial 2 Question P3-6. T-accounts for May 31, 2011.
![Page 1: Tutorial 2 Question P3-6. T-accounts for May 31, 2011.](https://reader036.fdocuments.in/reader036/viewer/2022081514/5516eed2550346fe558b4a33/html5/thumbnails/1.jpg)
Tutorial 2
Question P3-6
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T-accounts for May 31, 2011
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Property and Equipment (net)
(BB) $8,362
Retained Earnings
$5,827 (BB)
Accounts Payable
$835 (BB)
Prepaid Expenses
(BB) $82
Accrued Expenses Payable
$1,675 (BB)
Long-term Notes Payable
$667 (BB)
Other Noncurrent Assets
(BB) $1,850
Contributed Capital
$492 (BB)
Receivables
(BB) $1,162
Other current assets
(BB) $1,196
Cash
(BB) $360
Spare parts, supplies and Fuel
(BB) $294
Other noncurrent liabilities
$3,513 (BB)
Other current liabilities
$297 (BB)
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Revenue
$0 (BB)
Rent Expense
(BB) $0
Wages Expense
(BB) $0
Temporary T-accounts
Cost of Sales(BB) $0
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Transactions
• A) Provided delivery service to customers, receiving $4,567 in accounts receivable and $17,600 in cash
DR. Accounts Receivable $4,567DR. Cash $17,600 CR. Revenue $22,167
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Transactions
• B) Purchased new equipment costing $1,345; signed a long-term note
DR. Property and Equipment $1,345 CR. Long-term notes payable $1,345
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Transactions
• C) Paid $4,598 cash to rent equipment and aircraft, with $3,067 for rental this year and the rest for rent next year. ?
DR. Prepaid Expenses $4,598 CR. Cash $4,598
DR. Rent Expense $3,067 CR. Prepaid Expenses $3,067
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Transactions
• D) Spent $1,348 in cash to maintain and repair facilities and equipment during the year.
DR. Property and Equipment $1,348 CR. Cash $1,348
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Transactions
• E) Collected $4,824 from customers on account
DR. Cash $4,824 CR. Accounts Receivable $4,824
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Transactions
• F) Repaid $18 on a long term note
DR. Long-term notes payable $18 CR. Cash $18
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Transactions
• G) Issued additional stock for $16
DR. Cash $16 CR. Contributed Capital $16
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Transactions
• H) Paid employees $10,031 during the year
DR. Wage Expense $10,031 CR. Cash $10,031
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Transactions
• I) Purchased in cash and used $5,348 in fuel for the aircraft and equipment during the year.
DR. Spare parts, supplies and fuel $5,348 CR. Cash $5,348
DR. Cost of Sales $5,348 CR. Spare parts, supplies and fuel $5,348
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Transactions
• J) Paid $784 on accounts payable
DR. Accounts payable $784 CR. Cash $784
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Transactions
• K) Ordered $72 in spare parts and supplies– Only ordered, no goods received yet– Not a transaction
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2012 Effects
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Property and Equipment (net)
(BB) $8,362(B) 1,345(D) 1,348
(EB) 11,055
Prepaid Expenses
(BB) $82(C) 4,598
$ 3,067 (C)
(EB) $1,613
Other Noncurrent Assets
(BB) $1,850
(EB) $1,850Receivables
(BB) $1,162(A) 4,567
4,824 (E)
(EB) $ 905 Other current assets
(BB) $1,196
(EB) $1,196
Cash
(BB) $360(A) 17,600(E) 4,824(G) 16
$4,598 (C)1,348 (D)
18 (F)10,031 (H)
5,348 (I)784 (J)
(EB) $673 Spare parts, supplies and Fuel
(BB) $294(I) 5,348
(I) 5,348
(EB) $294
Current Assets Noncurrent Assets
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Accounts Payable
(J) $784 $835 (BB)
$51 (EB)
Accrued Expenses Payable
$1,675 (BB)
$1,675 (EB)
Long-term Notes Payable
(F) $18 $ 667 (BB)1,345 (B)
$1,994 (EB)
Other noncurrent liabilities
$3,513 (BB)
$3,513 (EB)
Other current liabilities
$297 (BB)
$297 (EB)
Current Liabilities Noncurrent Liabilities
Retained Earnings
$5,827 (BB)
?
Contributed Capital
$492 (BB)16 (G)
$508 (EB)
Stockholder’s Equity
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Revenue
$0 (BB)22,167 (A)
22,167 (EB)
Rent Expense
(BB) $0(C) 3,067(EB) $3,067
Wages Expense
(BB) $0(H) 10,031(EB) 10,031
Temporary T-accounts
Cost of Sales(BB) $0(I) 5,348(EB) 5,348
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Income StatementFedEx, Inc.
Income StatementFor Year Ended May 31, 2012
(in millions of dollars)Revenues $ 22,167
Cost of Sales 5,348
Gross Margin 16,819
Operating Expenses
Rent 3,067
Wages 10,031
Total Expenses 13,098
Net Income 3,721
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Statement of SEFedEx, Inc.
Statement of Stockholder’s EquityFor Year Ended May 31, 2012
(in millions of dollars)Retained Earnings, May 31, 2011 $ 5,827
Add: Net Income for the year 3,721
Retained Earnings, May 31, 2012 $ 9,548
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Balance SheetFedEx, Inc.Balance Sheet
As of May 31, 2012(in millions of dollars)
Assets Liabilities
Current Assets: Current Liabilities:
Cash $ 673 Accounts Payable $ 51
Receivables 905 Accrued Expenses Payable 1,675
Prepaid Expenses 1,613 Other current liabilities 297
Spare parts, supplies & fuel 294 Total current liabilities 2,023
Other current Assets 1,196 Long-term Notes Payable 1,994
Total Current Assets: 4,681 Other noncurrent liabilities 3,513
Property and equipment, net 11,055 Stockholder’s Equity
Other noncurrent assets 1,850 Contributed Capital $ 508
Total Assets: 17,586 Retained Earnings 9,548
Total Liabilities and SE 17,586
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Statement of Cash FlowsFedEx, Inc.
Statement of Cash FlowsFor Year Ended May 31, 2012
(in millions of dollars)Cash flows from operating activities
Collected from customers $ 22,424
Paid to suppliers and employees (20,761)
Net cash flow from operating activities $ 1,663
Cash flows from investing activities
Cash paid to maintain and repair facilities and equipment (1,348)
Net cash flow from investing activities $ (1,348)
Cash flows from financial activities
Cash received from stock issue 16
Cash paid to repay long-term notes (18)
Net cash flow from financial activities $ (2)
Total Change in Cash 313
Cash at beginning of year 360
Cash at end of year 673
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Total Asset Turnover Ratio
• Measures sales generated per dollar of assets. Higher = more efficient at managing assets.
Total Asset Turnover
Ratio
Sales (or Operating) Revenues
Average Total Assets=
(Beginning total assets + ending total assets) / 2
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Total Asset Turnover Ratio
1.4422,167
15,446=
(13,306 + 17,586) / 2
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Total Asset Turnover Ratio
• 1.44• Very hard to tell anything without comparing
to close competitors