Preparing a statement of cash flows from changes in balance sheet accounts. The comparative balance sheets of Southwest Airlines show the following information for a recent year (amounts in thousands):
|
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 Nonoperating Assets |
8,711 |
Increase |
|
Accounts Payable |
660 |
Decrease |
|
Other Current Liabilities |
114,596 |
Increase |
|
Long Term Debt |
244,285 |
Increase |
|
Other Nonoperating Liabilities |
140,026 |
Increase |
|
Common Stock |
96,991 |
Increase |
|
Retained Earnings |
340,879c |
Increase |
aCash was $378,511 at the beginning of the year and $418,819 at the end of the year.
bSouthwest 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 Southwest Airlines for the year. Treat changes in nonoperating assets as investing transactions and changes in nonoperating liabilities as financing transactions.
b. Discuss briefly the pattern of cash flows from operating, investing, and financing activities for Southwest Airlines for the year.