Problem 4-11 Statement of cash flows; indirect method [LO4-8]

Presented below are the 2018 income statement and comparative balance sheets for Santana Industries.

SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in thousands)
Sales revenue	$	14,650
Service revenue		3,800
Total revenue				$	18,450
Operating expenses:
Cost of goods sold		7,400
Selling		2,600
General and administrative		1,700
Total operating expenses					11,700
Operating income					6,750
Interest expense					220
Income before income taxes					6,530
Income tax expense					2,700
Net income				$	3,830

Balance Sheet Information ($ in thousands)	Dec. 31, 2018				Dec. 31, 2017
Assets:
Cash	$	7,550			$	2,380
Accounts receivable		2,900				2,400
Inventory		4,400				3,200
Prepaid rent		170				340
Plant and equipment		14,900				12,400
Less: Accumulated depreciation		(5,300	)			(4,700	)
Total assets	$	24,620			$	16,020
Liabilities and Shareholders Equity:
Accounts payable	$	1,800			$	1,300
Interest payable		120				0
Deferred service revenue		840				620
Income taxes payable		570				840
Loan payable (due 12/31/2020)		5,400				0
Common stock		10,200				10,200
Retained earnings		5,690				3,060
Total liabilities and shareholders' equity	$	24,620			$	16,020

Additional information for the 2018 fiscal year ($ in thousands):

1. Cash dividends of $1,200 were declared and paid.
2. Equipment costing $4,400 was purchased with cash.
3. Equipment with a book value of $700 (cost of $1,900 less accumulated depreciation of $1,200) was sold for $700.
4. Depreciation of $1,800 is included in operating expenses.

Required: Prepare Santana Industries' 2018 statement of cash flows, using the indirect method to present cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.)