The 2016 income statement and the 2016 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 since 2016 showed record profits. As the controller of the company, you must answer the question.

Requirements
1. Prepare a statement of cash flows for 2016 in the format that best shows the relationship between net income and operating cash flow. The company sold no plant assets or long-term investments and issued no notes payable during 2016. There were no noncash 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 2016.
3. Considering net income and the company's cash flows during 2016, was it a good year or a bad year? Give your reasons.

A1 T-Bar-M Camp, Inc. Income Statement Year Ended December 31, 2016 2 (In thousands) Revenues: 4Sales revenue 5 Expenses 6 Cost of goods sold 7 Salary expense 8 Depreciation expense 9Interest expense 10 Amortization expense 436 221 48 46 Total expenses 12 13 Net income A1 T-Bar-M Camp, Inc. Comparative Balance Sheets December 31, 2016 and 2015 015 (In thousands) 3 Assets: 2016 4 Cash 5 Accounts receivable, net 6 Inventories 7 Property, plant, and equipment 8 Accumulated depreciation 9 Long-term investments 10 Patents 72 94 369 181 259 (198 Totals 12 Liabilities and owners' equity: 63 56 13 Accounts payable 14 Accrued liabilities 16 17 18 15 Notes payable, long-term Common stock, no par Retained earnings 79 149 264 61 Totals