The 2014 income statement and the 2014 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 because 2014 showed record profits. As the controller of the company, you must answer the question.
T-Bar-M Camp Inc.
Income Statement
For the Year Ended December 31, 2014
(in thousands)
Revenues:
Sales revenue ................................................................................................ $436
Expenses:
Cost of goods sold......................................................................................... $221
Salary expense.................................................................................................... 48
Depreciation expense ........................................................................................ 57
Interest expense................................................................................................. 13
Total expenses ................................................................................................ 339
Net income .................................................................................................... $ 97

Requirements
1. Prepare a statement of cash flows for 2014 in the format that best shows the relationship between net income and operating cash flow. The company sold no plant and equipment or long-term investments and issued no notes payable during 2014. There were no non-cash investing and financing transactions during the year. Show all amounts in thousands.
2. Answer the board members' question: Why is the cash balance so low? 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? Give your reasons. Explain the format you chose for the statement of cash flows.

T-Bar-M Camp Inc. Comparative Balance Sheet As at December 31, 2014 and 2013 (in thousands) 2014 2013 Assets Cash Accounts receivable, net Inventories Long-term investments Property, plant, and equipment. Accumulated depreciation Patents, net $ 17 72 194 31 369 (244) $ 63 61 181 0 259 (198) 188 $554 Totals $616 Liabilities and Shareholders' Equity Accounts payable. Accrued liabilities Notes payable, long-ter $ 56 17 264 61 156 $554 63 12 179 149 213 $616 Common shares. Retained earnings