Answer the following questions.

a. Based on a review of the income statement for Spin Master in Appendix III at the end of the textbook, determine if Spin Master sells products or services. Explain your answer.

b. Based on a review of WestJet?s income statement in Appendix III at the end of the textbook, determine if WestJet sells products or services. Explain your answer.

c. The income statement for Spin Master shows a gross profit of $800,456 (thousand) for the year ended December 31, 2017. Explain what this gross profit represents.

d. Did Spin Master have sufficient gross profit to cover operating expenses for the year ended December 31, 2017?

e. Is the income statement format used by Spin Master a classified multiple-step, a multiple-step, or a singlestep? (Compare the income statement for Spin Master to those in Exhibits 5.13, 5.14, and 5.15.)

f. Refer to the balance sheets for Spin Master and WestJet in Appendix III at the end of the textbook. Both balance sheets include Inventory. Explain how Inventory is unique for each of these companies.

Exhibit 5.13

Exhibit 5.14

Exhibit 5.15

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Lifetime Equipment Co-op Income Statement For Year Ended February 23, 2020 $321,000 Sales. $ 4,300 Less: Sales discounts. Sales returns and allowances. 2,000 6,300 $314,700 Net sales. Cost of goods sold.. 230,400 $ 84,300 Gross profit from sales. Operating expenses: Selling expenses: Sales salaries expense $18,500 Advertising expense. 11,300 Rent expense, selling space. 8,100 Depreciation expense, store equipment. 3,000 Store supplies expense. 1,200 $42,100 Total selling expenses. General and administrative expenses: Office salaries expense. $25,300 Office supplies expense. Rent expense, office space Depreciation expense, office equipment. 1,800 900 700 Insurance expense. 600 Total general and administrative expenses. 29,300 Total operating expenses. 71,400 $ 12,900 Profit from operations.. --Note: Rent revenue is added Other revenues and expenses: Interest expense is subtracted $ 2,800 Rent revenue Interest expense. 2,440 -to get total Other revenues $ 15,340 360 and expenses. Profit Lifetime Equlpment Co-op Income Statement For Year Ended February 23, 2020 Net sales. $314,700 Cost of goods sold. 230,400 Gross profit from sales. $ 84,300 Operating expenses: Salaries expense. $43,800 Advertising expense. 11,300 Rent expense. 9,000 Depreciation expense 3,700 Supplies expense 3,000 Insurance expense. Total operating expenses. 600 71,400 $ 12,900 Profit from operations Other revenues and expenses: Rent revenue. $ 2,800 Interest expense 360 2,440 Profit. $ 15,340