1.) The 2015 comparative income statement and the 2015 comparative balance sheet of Attleboro Group, Inc. have just been distributed at a meeting of the companys Board of Directors. The members of the board raise a fundamental question: Why is the cash balance so low? This question is especially hard to understand because 2015 showed record profits. As the controller of the company, you must answer the question.

Requirements:

1) Prepare a statement of cash flows for 2015 in the format that best shows the relationship between net income and net operating cash flow. The company sold no plant assets or long-term investments and issued no notes payable during 2015. There were no non-cash investing and financing transactions during the year. Show all amounts in thousands.

2) Considering net income and the companys cash flows during 2015, was it a good year or a bad year? Give your reasons.

ATTLEBORO GROUP INC. Comparative Balance Sheet December 31, 2015 and 2014 2014 2015 Assets Current Assets: 11,800 15,200 Cash 43,900 42,200 Accounts Receivable 93,500 96,800 Merchandise Inventory Long-term Assets: 112,560 121,320 Plant Assets (20.2200 Accumulated Depreciation-Plant Assets 14,000 39,800 Land s 291,700 s 260,400 Total Assets Liabilities Current Liabilities: 25,100 26,300 Accounts Payable 22,500 24,200 Accrued Liabilities Long-term Liabilities: 51,000 64,000 Notes Payable 112,800 100,300 Total Liabilities Stockholders' Equity Common Stock 136,600 128,300 19,300 Retained Earnings 54,800 191,400 Total Stockholders' Equity 147.600 Total Liabilities and Stockholders' Equity S 291,700 260,400