Question

Calgary-based WestJet Airlines Ltd. provides services throughout Canada and to some international destinations.
Excerpts from its 2013 financial statements are in Exhibits 2-19A to C.
Required:
a. Assuming that all the sales were on account, determine the amount of cash that was collected from customers in 2013.
b. Why do you think WestJet does not report a Cost of Goods Sold account on its statement of income?
c. Explain what the item advance ticket sales in the current liabilities section of the statement of financial position represents. What type of transaction gave rise to this liability? What will cause this liability to decrease?
d. How much money did WestJet use in 2013 to repurchase shares? Assuming the shares were all repurchased using cash, what was the effect on the accounting equation of the share repurchase?
e. How much did WestJet spend on acquiring new aircraft in 2013? If it financed the acquisitions with long-term debt, what was the effect on the accounting equation?


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  • CreatedJune 11, 2015
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