Financial Statements
Presented by:
Leo
Ashley
Tony
David
Sungtae
Account balances on June 30,2006 (in
millions of dollars)
Account
Flight & ground equipment
Retained earnings
Accounts payable
Prepaid expenses
Accrued expenses payable
Long-term notes payable
Contributed capital
Receivables
Other assets
Cash
Spare parts, supplies & fuel
Other noncurrent liabilities
Balance
$3,476
970
554
64
761
2,016
702
923
1,011
155
164
790
Asset
Stockholders’ equity
Liability
Asset
Liability
Liability
Stockholders’ equity
Asset
Asset
Asset
Asset
Liability
T-Account
Assets
Cash
155
155
Bal.
Bal.
Prepaid expense
64
64
Bal.
Receivable
923
923
Bal.
Other assets
1,011
1,011
Spare parts, supplies, and fuel
164
164
Bal.
Flights/ground equipment
3,476
3,476
Bal.
Liabilities
Bal.
Long-term note payable
Accrued Expense payable
Accounts payable
554
554
Bal.
761
761
Bal.
2,016
2,016
Stockholders' equity
Bal.
Retained earnings
Contributed capital
Other noncurrent liablilities
790
790
Bal.
702
702
Bal.
970
970
Transactions occurred the next year ending
June 30, 2007(in millions of dollars)
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Provided delivery service to customers, receiving $7,200 in accounts receivable and $600 in
cash. (+A: cash +600; accounts receivable +7,200; +R: +7,800)
Purchased new equipment costing $816; signed a long-term note. (+L: long-term note
payable +816; +A: equipment +816)
Paid $744 cash to rent equipment and aircraft, with $648 for rental this year and the rest for
rent next year. (+A: Prepaid expenses +96; rental expenses: +648; -A: cash -744)
Spent $396 cash to maintain and repair facilities and equipment during the year. (+E, -SE:
maintenance expense +396; -A: cash -396)
Collected $6,524 from customers on account. (+A: Cash +6,524; -A: account receivable 6,524)
Borrowed $900 by signing a long-term note. (+A: cash +900; +L: long-term note payable
+900)
Issued additional stock for $240. (+A: cash +240; +L: contributed capital +240)
Paid employees $3,804 during the year. (-A: cash -3,804; +E, -SE: wages expense: +3,804)
Purchased for cash and used $492 in fuel for the aircraft and equipment during the year. (-A:
cash -492; +E, -SE: utilities expense: +492)
Paid $384 on accounts payable. (-A: cash -384; -L: account payable -384)
Ordered $72 in spare parts and supplies. (No transaction)
T-Account
Flight and ground equipment
3,476
Beg.
816
(b)
4,292
Bal.
Beg.
( c)
Bal.
Prepaid expense
64
96
160
Beg.
(a)
(e)
(f)
(g)
Bal.
Cash
155 ( c)
600 (d)
6,524 (h)
900 (i)
240 (j)
2,599
744
396
3,804
492
384
Beg.
(a)
Bal.
Receivables
923 (e)
7,200
1,599
Beg.
Bal.
Other assets
1,011
1,011
6,524
Spare parts, supplies, and fuel
164
Beg.
164
Bal.
Liabilities
(j)
Accounts payable
554
384 Beg.
170
Bal.
Accrued expense payable
761
Beg.
761
Bal.
Long-term note payable
2,016
Beg.
816
(b)
900
(f)
3,732
Bal.
Other noncurrent liablilities
790
Beg.
790
Bal.
T-Account
Stockholders' equity
Contributed capital
Beg.
(g)
Bal.
702
240
942
Retained earnings
Beg.
Bal.
970
970
Revenues
Service revenues
Beg.
(a)
Bal.
0
7,800
7,800
Expenses
Beg.
( c)
Bal.
Rental expense
0
648
648
Beg.
(i)
Bal.
Utilities expense
0
492
492
Maintainance expense
Beg.
0
(d)
396
Bal.
396
Wages expense
Beg.
0
(h)
3,804
Bal.
3,804
Income Statement
Federal Express Corporation
Income Statement
For the Month Ended June 30, 2007
(dollars in millions)
Revenue
Gross Sales
Net Sales
7800
7800
Expenses
Rent
Repairs and Maintenance
Utilities
Wages
Total Expenses
Net Operating Income
648
396
492
3804
5340
2460
Statement of Retained Earnings
Federal Express Corporation
Statement of Retained Earnings
Month Ended June 30, 2007
(dollars in millions)
Beginning balance, June 30, 2006
Net income
Ending retained earnings
970
2460
3430
Balance Sheet
Federal Express Corporation
Balance Sheet
at June 30, 2007
(dollars in millions)
ASSETS
LIABILITIES
Current Assets
Current Liabilities
Cash
Accounts receivable
Pre-paid expenses
Total Current Assets
$2,599
1,599
160
$4,358
Accounts payable
Accrued expense payable
Total Current Liabilities
Long-term Liabilities
Other noncurrent Liabilities
$170
761
$931
3,732
790
Fixed Assets
Flight and ground equipment
Spare parts, supplies and fuel
Other assets
Total Net Fixed Assets
TOTAL ASSETS
$4,292
Shareholders' Equity
164
Contributed capital
1,011
Retained earnings
$942
3,430
$5,467
Total Shareholders' Equity
$4,372
$9,825
TOTAL LIABILITIES & EQUITY
$9,825
Statement of Cash Flows
Federal Express Corporation
Statement Cash Flows
For the Month Ended June 30, 2007
(dollars in millions)
Operating Activities
Cash from: Customers
Cash to:
7124
Suppliers
(2016)
Employees
(3804)
Net cash provided by operating activities
1304
Investing Activities
Net cash provided by investing activities
0
Financing Activities
Issued stock
Borrowed from banks
Net cash provided by financing activities
Net increase in cash
Cash at beginning of month
240
900
1140
2444
155
Cash at end of month
2599
Total Asset Turnover Ratio
Total Asset Turnover Ratio = Sales Revenues / Average Total Assets
= 7800 / [(5793 + 9825) / 2]
= 7800 / 7809
= 1.00
Conclusion: This ratio measures the sales generated per dollar of assets.
It reflects how efficiently one company utilize its assets. Here, the ratio
is 1.00, which means that Federal Express uses every 1 dollar of asset
to generate 1 dollar of revenue.