In September 2020, EastWest Airlines Sells All of Its Available

question 8

Short Answer

In September 2020, EastWest Airlines sells all of its available seats for travel from Calgary to Ixtapa, Mexico during the months of December, 2020 and January and February, 2021. Total airfare collected by EastWest for the sale of these airline tickets is $2,400,000. There are an equal number of flights to Ixtapa each month. EastWests' estimated Cost of Sales (fuel, salaries, etc.) is 60%.
Instructions
a) Prepare all of the necessary journal entries for 2020.
b) What liabilities, if any, will need to be reflected on the December 2020 statement of financial position?

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Definitions:

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