WestJet Airlines Ltd. is one of Canada?s leading airlines, offering service to destinations in Canada, the United
Question:
WestJet Airlines Ltd. is one of Canada?s leading airlines, offering service to destinations in Canada, the United States, Mexico, the Caribbean, and Europe. The following is a partial extract from its December 31, 2017, notes to the financial statements
Instructions
a. WestJet uses straight-line depreciation for all of its depreciable property and equipment. For which of the assets shown in Note 1 might WestJet consider using units of-production instead of straight-line depreciation? Should WestJet use units-of production for those assets?
b. According to this note, major overhaul expenditures are treated differently than other fleet maintenance costs. Explain how WestJet records these items. Is this appropriate? Why or why not?
c. WestJet depreciates the cost of leasehold improvements over the terms of the leases. Is this appropriate? Are these terms the same as the physical lives of these assets?
d. Does WestJet use component depreciation for any of its property and equipment assets? Explain.
Step by Step Answer:
Accounting Principles Volume 1
ISBN: 978-1119502425
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak