Reference no: EM132447559

Answer the following question :

1. Based on a cursory review, what items / amounts in the financial statements seem most noteworthy from an operating perspective, investing perspective, and financing perspective?

2. How would you feel about investing in or lending to this company? Why?

3. In reading financial statement note 1 ("Summary of Significant Accounting Policies"; pages 94 - 101 of the PDF), identify an example where the company has applied the concepts of going concern, periodicity, and/or measurement.

Review the 2018 Annual Report (Form 10-K) for Southwest Airlines Co. (financial statements begin on page 89 of the PDF) and respond to the questions / requirements below.

1. Verify that the accounting equation remained in balance for this company as of the end of the most recent fiscal year. Where in the Annual Report can this be verified?

2. What are the most substantial (largest) components of assets, liabilities, and owners' equity for this company?

3. What are the most significant (largest) revenues and expenses for this company?

4. What are the most significant (largest) sources and uses of cash for this company in recent years?

Review the 2018 Annual Report (Form 10-K) for Southwest Airlines Co. (financial statements begin on page 89 of the PDF) and respond to the questions / requirements below.

1. Identify and describe an example where this company might have received cash in advance of earning revenue (revenue deferral) or paid cash in advance of incurring an expense (expense deferral).

2. Identify and describe an example where this company might have earned revenue in advance of receiving cash (revenue accrual) or incurred an expense in advance of paying cash (expense accrual).

3. What adjustments at the end of the fiscal period would have likely been necessary related to these deferral and accrual balances.