3. 2 b. Cash Accounts receivable Delivery service revenue Property, plant and equipment Long-term note payable 3 C. Prepaid expenses 4 5 6 7 8 B d. Rental expense Cash Repairs expense Cash e Cash Accounts receivable DO 2.390 25.504 27,894✔ 3.474 4,828 3,474 3.438 8,284 904 904- 25.485 25,485 f. Long-term note payable 170 Cash 170 16 4 Cash Common stock Additional paid-in-capital Wages expense Cash Spare parts, Supplies, and Fuel Cash 18 2 18 9.776 9,778 7.164 7,184 10 j Spare parts, Supplies, and Fuel expense 8.550 Spare parts. Supplies, and Fuel 6,550 11 k. Accounts payable Cash 824 824 12 L No journal entry required Following are selected account balances (in millions of dollars) from a recent UPS annual report, followed by several typical transactions. Assume that the following are account balances on December 31 (end of the prior fiscal year: Account Property, plant, and equipment (net) Retained earnings Accounts payable Prepaid expenses Accrued expenses payable Long-term notes payable Other non-current assets Common stock ($0.01 par value) Balance $14.294 Account Balance Receivables $1-649 10,966 Other current assets 1,297, Cash 899 924 128 Spare parts, supplies, and fuel 436 2110 Other non-current liabilities 1,530 Other current liabilities 2,612 Additional Paid-in Capital 3,350 1,979 667 These accounts are not necessarily in good order and have normal debit or credit balances. (Note: Because these are not all of UPS's accounts, these will not balance in a trial balance.) Assume the following transactions (in millions, except for par value) occurred the next fiscal year beginning January 1 (the current year): a. Provided delivery service to customers, who paid $2.390 in cash and owed $25.504 on account. b. Purchased new equipment costing $5.474; signed a long-term note. c. Paid $8,264 cash to rent equipment and aircraft, with $3.436 for rent this year and the rest for rent next year (a prepaid expense). d. Spent $904 cash to repair facilities and equipment during the year e. Collected $25,485 from customers on account. f. Repaid $170 on a long-term note (ignore interest). g. Issued 200 million additional shares of $0.01 par value stock for $18 (that's $18 million). h. Paid employees $9.776 for work during the year. i. Purchased spare parts, supplies, and fuel for the aircraft and equipment for $7.164 cash. j. Used $6,550 in spare parts, supplies, and fuel for the aircraft and equipment during the year. k. Paid $824 on accounts payable. 1. Ordered $92 in spare parts and supplies. Required: 1. Prepare journal entries for each transaction. 2. Enter the ending balances from December 31 as the respective beginning balances for January 1 of the current year. Record in the T-accounts the effects of each transaction. Label each using the letter of the transaction.