The 20X8 income statement and the 20X8 comparative balance sheet of T-Bar-M Camp, Inc., have just been distributed at a meeting of the camp's board of directors. The directors raise a fundamental question: Why is the cash balance so low? This question is especially troublesome since 20X8 showed record profits. As the controller of the company, you must answer the question.

Required
1. Prepare a statement of cash flows for 20X8 in the format that best shows the relationship between net income and operating cash flow. The company sold no plant assets or long-term investments and issued no notes payable during 20X8. There were no noncash investing and financing transactions during the year. Show all amounts in thousands. (pp. 630, 635-636)
2. Answer the board members' question: Why is the cash balance so low? Point out the 2 largest cash payments during 20X8. (Challenge)
3. Considering net income and the company's cash flows during 20X8, was it a good year or a bad year? Give your reasons.

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T-Bar-M Camp, Inc. Comparative Income Statement Year Ended December 31, 20x8 (In thousands) Revenues: Sa les revenue ....$436 Expenses: Cost of goods sold. Sa lary expense DerHS);,い441 6.st):ㅺ15A. Interest expense $221 48 46 13 ...- Total expenses 339 $ 97 Net income T-Bar-M Camp, Inc. Comparative Balance Statement December 31, 20X8 and 20X7 (In thousands) 20X8 20X7 Assets Cash Accounts receivable, net 72 Inventories Long-term investments Property, plant and equipment...369 Accumulated depreciation. Patents $ 17 $ 63 61 181 194 31 259 (198) 188 554 (244) ota $ 616 Liabilities and Owners' Equity Accounts payable Accrued liabilities Notes payable, long-term. Common stock, no par.. Retained earnings $ 63 12 179 149 213 616 s 56 17 264 61 156 554 ota