Top managers of Charter Flight Service, Inc., are reviewing company performance for 19X7. The income statement reports a 20-percent increase in net income over 19X6.

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Top managers of Charter Flight Service, Inc., are reviewing company performance for 19X7. The income statement reports a 20-percent increase in net income over 19X6. However, most of the increase resulted from an extraordinary gain on insurance proceeds covering fire damage to an airplane. The balance sheet shows a large increase in receivables. The cash-flow statement, in summarized form, reports the following.

\section*{Required}
Write a memo to give Charter managers your assessment of 19X7 operations and your outlook for the future. Focus on the information content of the cash-flow data.
Preparing the statement of cash flows-direct method \((O b j .2,3)\)
Preparing the statement of cash flows-direct method (Obj. 2, 3, 4)

Net cash outflow from operating activities. Net cash inflow from investing activities.... Net cash inflow from financing activities. Increase in cash during 19X7........ $(80,000) 40,000 50,000 $ 10,000