The 2014 comparative income statement and the 2014 comparative balance sheet of Eclipse Golf Inc. have just been distributed at a meeting of the company's board of directors.

In discussing the company's results of operations and year-end financial position, the members of the board of directors raise a fundamental question: Why is the cash balance so low? This question is especially puzzling to the board members because 2014 showed record profits. As the controller of the company, you must answer the question.

Required
1. Prepare a cash flow statement for 2014 in the format that best shows the relationship between net income and operating cash flow. The company sold no capital assets or long-term investments and issued no notes payable during 2014. The changes in all current accounts except short-term notes payable arose from operations. There were no noncash financing and investing transactions during the year. Show all amounts in thousands. Amortization expense on the patent was $5,500.
2. Answer the board members' question: Why is the cash balance so low? In explaining the business's cash flows, identify two significant cash receipts that occurred during 2013 but not in 2014. Also point out the two largest cash payments during 2014.
3. Considering net income and the company's cash flows during 2014, was it a good year or a bad year for Eclipse Golf Inc.? Give your reasons.

ECLIPSE GOLF INC Income Statement For the Years Ended December 31, 2014 and 2013 (amounts in thousands) 2014 2013 Revenues and gains: $155.0 9.0 164.0 Sales revenue $222.0 Gain on sale of equipment (sale price, $17.5) Total revenues and gains penses and losses: Cost of goods sold Salaries expense Amortization expense Interest expense Loss on sale of land (sale price, $30.5) 222.0 Ex 110.5 24.0 28.5 6.5 81.0 14.0 16.5 10.0 17.5 139.0 $25.0 Tota Net income l expenses and losses 169.5 $ 52.5 ECLIPSE GOLF INC Balance Sheet December 31, 2014 and 2013 (amounts in thousands) Assets Cash Accounts receivable, net Inventories Property, plant, and equipment, net Patents, net 2014 2013 $ 6.5 46.0 97.0 74.0 88.5 $312.0 $31.5 30.5 90.5 30.5 94.0 $277.0 Total assets Liabilities and Shareholders' Equity Notes payable, short-term (for general borrowing) Accounts payable Accrued liabilities Notes payable, long-term Common shares Retained earnings $16.0 31.5 6.0 73.5 74.5 110.5 $312.0 $50.5 28.0 8.5 81.5 30.5 78.0 $277.0 Total liabilities and shareholders' equity