Presented below are the 2013 income statement and comparative balance sheets for Santana Industries.

Additional information for the 2013 fiscal year ($ in thousands):

1. Cash dividends of $1,000 were declared and paid.

2. Equipment costing $4,000 was purchased with cash.

3. Equipment with a book value of $500 (cost of $1,500 less accumulated depreciation of $1,000) was sold for $500.

4. Depreciation of $1,600 is included in operating expenses.

Required:

Prepare Santana Industries’ 2013 statement of cash flows, using the indirect method to present cash flows from operating activities.

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SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2013 (S in thousands) Sales revenue $14,250 3,400 Service revenue Total revenue $17,650 Operating expenses: Cost of goods sold Selling General and administrative 7,200 2,400 1,500 Total operating expenses 11,100 6,550 Operating income Interest expense Income before income taxes 200 6,350 2,500 Income tax expense $ 3,850 Net income Dec. 31, 2012 Balance Sheet Information ($ in thousands) Dec. 31, 2013 Assets: Cash Accounts receivable $ 7,350 2,500 4,000 $ 2,200 2,200 3,000 Inventory Prepaid rent Plant and equipment Less: Accumulated depreciation 150 14,500 (5,100) 300 12,000 (4,500) $23,400 Total assets $15,200 Liabilities and Shareholders' Equity: Accounts payable Interest payable Unearned service revenue $ 1,400 100 $ 1,100 800 600 Income taxes payable Loan payable (due 12/31/2012) Common stock Retained earnings 550 800 5,000 10,000 5,550 10,000 2,700 Total liabilities and shareholders' equity $23,400 $15,200