PREPARATION AND ANALYSIS OF A STATEMENT OF CASH FLOWS. SDPS, Inc., provides airport transportation services in southern California. An income statement for 19x6 and balance sheets for 19x6 and-19x5 appear below:

REQUIRED:
i Prepare a statement of cash flows for 19x6, using the direct method to determine cash flows from operations.
2. What has been responsible for the decrease in cash?
3. Does an examination of the changes in the current liability accounts suggest how SDPS financed its increase in net property during a period in which it had a substantial net loss?

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Service revenue SDPS, INC. Income Statement For the Year Ended December 31, 19x6 Less: Operating expenses: Wages Rent $278,000 229,000 83,000 $937,000 Fuel Maintenance Depreciation Income (loss) from operation Less: Loss on sale of vehicles Less: Interest expense Net loss 138,000 215,000 943,000 (6,000) (3,000) (14,000) $ (23,000)