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 Non-operating Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,026 Increase

Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,991 Increase

Retained Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . 340,879c Increase

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a Cash was $378,511 at the beginning of the year and $418,819 at the end of the year.

b Incloud Airlines did not sell any property, plant, and equipment during the year.

c Net income was $474,378.

1. Show 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.

2. Discuss briefly the pattern of cash flows from operating, investing, and financing activities for Incloud Airlines for the year.