The 2017 income statement and the 2017 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 2017 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, 2017

(In thousands)

Revenue: ............................................................................. $436

Sales revenue

Expenses: ........................................................................... $ 221

Salary expense..........................................................................48

Depreciation expense ................................................................ 57

Interest expenses ...................................................................... 13

Total expense ........................................................................ 339

Net income ............................................................................ $97

Requirements
1. Prepare a statement of cash flows for 2017 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 2017. 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 2017.
3. Considering net income and the company's cash flows during 2017, was it a good year or a bad year? Give your reasons. Explain the format you chose for the statement of cash flows.

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T-Bar-M Camp Inc Comparative Balance Sheet As at December 31, 2017 and 2016 2017 2016 2 (in thousands) 3 Assets $ 63 61 181 $ 17 Cash Accounts receivable, net Inventorie Long-term investments 72 194 31 369 (244) 259 (198) 188 $616 $ 554 8 Property, t, and equipment Accumulated depreciation 10 Patents, net Totals 12 Liabilities and Shareholders' Equity 13 Accounts payable 14 Accrued liabilities 15 Notes payable, long-term 16 Common shares 17 Retained earnings 18 19 $ 56 $ 63 12 179 149 213 17 264 61 156 Totals