Preparing and interpreting the statement of cash flows. Exhibit 15.14 presents a comparative balance sheet and Exhibit 15.15 presents a comparative income statement for Airlines Corporation for 2008 and 2009. Expenditures on new property, plant, and equipment were $l,568 million in 2008 and $2,821 million in 2009. Changes in other noncurrent assets are investing activities, and changes in other noncurrent liabilities are financing activities.

a. Prepare T-account work sheets for 2008 and 2009 for a statement of cash flows.
b. Prepare a comparative statement of cash flows for 2008 and 2009 using the indirect method.
c. Comment on the relations between cash flows from operating, investing, and financing activities for 2008 and2009.

Transcribed Image Text:

Airlines Corporation Comparative Balance Sheet (all dollar amounts in millions) (Problem 11) EXHIBIT 15.14 December 31 2009 2008 2007 ASSETS $ 221 $ 465 $ 1,087 Cash Marketable Securities 1,066 1,042 Accounts Receivable (net) 888 913 741 Inventories.. 323 249 210 Prepayments 209 179 112 $ 2,732 $ 2,823 $ 2,150 Total Current Assets Property, Plant, and Equipment Accumulated Depreciation 7,704 7,710 8,587 (3,805) (3,838) (3,769) Other Assets 605 570 610 S 8,086 $ 6,701 Total Assets . $7,292 LIABILITIES AND SHAREHOLDERS EQUITY $ 552 Accounts Payable Short-Term Barrowing 596 540 447 446 121 Current Portion of Long-Term Debt 89 84 110 Advances from Customers 843 661 619 Other Current Liabilities 1,826 1,436 1,485 $ 3,757 $ 2,875 $ 3,223 Total Current Liabilities Long-Term Debt .... Deferred Tax Liability 1,475 1,334 1,418 368 364 352 Other Noncurrent Liabilities 721 719 715 $ 6,321 $ 5,640 $ 5,360 $ 119 Total Liabilities Common Stock.... Additional Paid-In Capital Accumulated Other Comprehensive Income 120 119 48 52 48 Unrealized Holding Gain on Marketable Securities Retained Earnings ... Treasury Stock. Total Shareholders Equity Total Liabilities and Shareholders' Equity 92 85 1,613 1,512 1,188 (112) $ 1,765 (112) $ 1,652 $ 7,292 (14) $ 1,341 $ 6,701 $ 8,086