The following are the summary account balances from a recent balance sheet of Exxon Mobil Corporation. The accounts have normal
The following are the summary account balances from a recent balance sheet of Exxon Mobil Corporation. The accounts have normal debit or credit balances, but they are not necessarily listed in good order. The amounts are shown in millions of dollars for the end of the prior year. Assume the year-end is December 31.
The following is a list of hypothetical transactions for January of the current year (in millions of dollars):
a. Purchased on account $ 1,610 of new equipment.
b. Received $3,100 on accounts receivable.
c. Received and paid $3 for utility bills.
d. Earned $39,780 in sales on account with customers; cost of sales was $5,984.
e. Paid employees $ 1,238 for wages earned during the month.
f. Paid three-fourths of the income taxes payable.
g. Purchased $23 in supplies on account (include in Inventories).
h. Prepaid $82 to rent a warehouse next month.
i. Paid $10 of other long-term debt principal and $1 in interest expense on the debt.
j. Purchased a patent (an intangible asset) for $6 cash.
1. Prepare T-accounts for December 31 of the current year from the preceding list; enter the beginning balances. You will need additional T-accounts for income statement accounts; enter zero for beginning balances.
2. For each transaction, record the effects in the T-accounts. Label each using the letter of the transaction. Compute ending balances. (Record two transactions in (d), one for revenue recognition and one for the expense.)
3. Prepare an income statement for January of the current year.
4. Compute the company's net profit margin ratio for the month ended January 31 of the current year. What does it suggest to you about Exxon Mobil Corporation?
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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