The 2017 comparative income statement and the 2017 comparative balance sheet of Eclipse Golf Inc. (shown below) 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 raise a fundamental question: Why is the cash balance so low? This question is especially puzzling to the board members because 2017 showed record profits. As the controller of the company, you must answer the question.

Required
1. Prepare a cash flow statement for 2017 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 2017. The changes in all current accounts except short-term notes payable arose from operations. There were no non-cash 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 2016 but not in 2017. Also point out the two largest cash payments during 2017.
3. Considering net income and the company's cash flows during 2017, was it a good year or a bad year for Eclipse Golf Inc.? Give your reasons.

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ECLIPSE GOLF INC. Income Statement For the Years Ended December 31,2017 and 2016 amounts in thousands) 2017 2016 Revenues and gains: Sales revenue $222.0 $155.0 9.0 164.0 Gain on sale of equipment (sale price, $17.5) Total revenues and gains 22.0 Expenses and losses: Cost of goods sold Salaries expense Amortization expense Interest expense Loss on sale of land (sale price, $30.5) 110.5 24.0 28.5 6.5 81.0 14.0 16.5 10.0 17.5 139.0 $25.0 169.5 $52.5 l expenses and losses Net income ECLIPSE GOLF INC. Balance Sheet December 31,2017 and 2016 (amounts in thousands) Assets Cash Accounts receivable, net Inventories Property, plant, and equipment, net Patents, net 2017 S 6.5 46.0 97.0 74.0 88.5 $312.0 2016 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