Base your answers to the following questions on the 2009 financial statements of Westjet Airlines Ltd. provided

Question:

Base your answers to the following questions on the 2009 of Westjet Airlines Ltd. provided in Exhibit 2-14. (Calgary-based Westjet, known for its corporate culture and providing customers with a user-friendly travel experience, has grown from a small regional airline to one that provides services throughout Canada and to some international destinations.)
a. Assuming that all the sales were on account, determine the amount of cash that was collected from customers in 2009.
b. Why do you think Westjet does not report a cost of goods sold account on their statement of earnings?
c. Explain what the account advance ticket sales in the current liabilities section of the represents. What type of transaction gave rise to this liability? What will cause this liability to decrease?
d. How much money did Westjet raise in 2009 by issuing shares? Assuming the shares were all issued for cash, what was the effect on the accounting equation of the share issuance?
e. How much did Westjet spend on acquiring new aircraft in 2009? If they financed the acquisitions with long-term debt, what was the effect on the accounting equation?
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
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...