Refer to the financial statements for each of Spin Master, Indigo, and WestJet in Appendix II.

Required

Answer the following questions.

Part 1

The December 31, 2017, balance sheet for Spin Master reports $32,978 (thousand) of PPE.

a. What does the $32,978 (thousand) represent (i.e., is it the cost of the PPE)?

b. Which generally accepted accounting principle (GAAP) requires that information in addition to the $32,978 (thousand) must be reported and where must it be reported?

c. What amount did Spin Master report as depreciation expense for the year ended December 31, 2017? Refer to the statements of cash flow in Appendix II. Alternatively, go to www.sedar.com, retrieve the complete set of audited annual financial statements, and refer to the appropriate note to the statements.

Part 2

a. WestJet’s balance sheet reports $4,567,504 (thousand) of property and equipment on December 31, 2017. What percentage is this of its total assets?

b. Indigo’s balance sheet reports $82,314 (thousand) of property and equipment at March 31, 2018. What percentage is this of its total assets?

c. Compare WestJet and Indigo’s inventory, and property and equipment, each as a percentage of total assets. Why do these percentages differ between firms? Review the asset section of each company’s balance sheet.