3. Preparing a statement of cash flows from changes in balance sheet accounts.
The comparative balance sheets of Incloud Airlines show the following information for a recent year (amounts in thousands of US$):
Change Amount Direction
Cash 40,308a Increase
Accounts Receivable 15,351 Decrease
Inventories 15,117 Increase
Prepayments 16,776 Increase
Property , Plant and Equipment (at cost) 1,134,644b Increase
Accumulated Depreciation 264,088b Increase
Other Non-operating Assets 8,711 Increase
Accounts Payable 660 Decrease
Other Current Liabilities 114,596 Increase
Long-Term Debt 244,285 Increase
Other Nona-operating lLiabilities 140,026 Increase
Common Stock 96,991 Increase
Retained Earn ings 340,879c Increase
a Cash was $378,511 at the beginning of the year and $418,819 at the end of the year. bIncloud Airlines did not sell any property, plant and equipment during the year. cNet income was $474,378.
a. Prepare a statement of cash flows for Incloud Airlines for the year. Treat changes in non- operating assets as investing transactions and changes in non-operating liabilities as financing transactions.
b. Discuss briefly the pattern of cask flows from operating, investing, and financing activities for Incloud Airlines for the year.