Exercise 4-21 Statement of cash flows; direct method [LO4-8]

Presented below is the 2016 income statement and comparative balance sheet information for Tiger Enterprises.

TIGER ENTERPRISES
Income Statement
For the Year Ended December 31, 2016
($ in thousands)
Sales revenue				$	7,360
Operating expenses:
Cost of goods sold	$	3,420
Depreciation		300
Insurance		160
Administrative and other		1,860
Total operating expenses					5,740
Income before income taxes					1,620
Income tax expense					660
Net income				$	960
Balance Sheet Information ($ in thousands)	Dec. 31, 2016			Dec. 31, 2015
Assets:
Cash	$	360		$	260
Accounts receivable		810			890
Inventory		700			660
Prepaid insurance		80			50
Plant and equipment		2,400			2,100
Less: Accumulated depreciation		(960	)		(660	)
Total assets	$	3,390		$	3,300
Liabilities and Shareholders' Equity:
Accounts payable	$	360		$	420
Payables for administrative and other expenses		360			460
Income taxes payable		260			210
Note payable (due 12/31/2017)		860			660
Common stock		960			860
Retained earnings		590			690
Total liabilities and shareholders' equity	$	3,390		$	3,300

Required:

Prepare the cash flows from operating activities section of Tiger's 2016 statement of cash flows using the direct method. Assume that all purchases and sales of inventory are on account, and that there are no anticipated bad debts for accounts receivable. (Hint: Use T-accounts for the pertinent items to isolate the information needed for the statement.) (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.)