Calculating and interpreting cash flows. Yahoo. Inc.. is an Internet service provider. The changes in its balance sheet accounts for two recent years appear below (amounts in thousands):

Year 8 Year 9 Cash Marketable Securities (current asset)

Accounts Receivable Prepayments Property, Plant, and Equipment (at cost) . .

Accumulated Depreciation Investments in Securities (noncurrent asset)

Accounts Other Current Payable Liabilities Common Stock Retained Earnings

$ 28,250 Increase $28,991 Increase 60,689 Increase 32,917 Decrease 4,267 Increase 5,904 Increase 384 Increase 5,509 Increase 3,155 Increase 14,930 Increase 552 Increase 2,554 Increase 10,477 Increase 9,053 Increase 1,086 Increase 3,605 Increase 6,447 Increase 11,598 Increase 103,796 Increase 36,980 Increase 4,659 Decrease 23,267 Decrease

a. Prepare columnar work sheets for the statement of cash flows for Year S and Year L) using the format in the upper panel of Exhibit 4.4. Yahoo. Inc.. did not declare or pa\ di\ idends during either year. It sold marketable securities during Year 9 at no gain or loss.

b. Prepare a statement of cash flows for Year 8 and Year 9 using the indirect method o\ computing cash flow from operations. The balance in cash was $33,547 at the end o\' Year 8 and $62,538 at the end of Year 9.

c. Discuss the relation between net income and cash flow from operations and the relation between cash flow from operating, investing, and financing activities during the two years.