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LarsonFFS06 - Chapter 6 Focus on Financial Statements...

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F o c u s o n F i n a n c i a l S t a t e m e n t s O n l i n e FFS 6-2 FFS 6-3 C h a p t e r 6 Required Answer the following questions. a. Based on a review of the income statement for Leon’s on page I-4 in Appendix I at the end of the textbook, determine if Leon’s sells products or services? Explain your answer. b. Based on a review of WestJet’s income statement on page I-13 in Appendix I at the end of the textbook, determine if WestJet sells products or services? Explain your answer. c. The income statement for Leon’s shows a gross profit of $188,428 (thousand) for the year ended December 31, 2002. Explain what this gross profit represents. d. Did Leon’s have sufficient gross profit to cover operating expenses for the year ended December 31, 2002? e. Is the income statement format used by Leon’s a classified multi-step, a multi-step, or a single-step (compare the income statement for Leon’s to those in Exhibits 6.16, 6.17, and 6.18 on pages 283 and 284 of the textbook)?
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