Case 1. The 20x2 comparative income statement and the 20X2 comparative balance sheet of Dexia Enterprises have just been distributed at a meeting of the company's board of directors. The members of the board of directors raise a fundamental question: Why is the cash balance so low? This question is especially troublesome because 20X2 showed record profits. As the controller of the company, you must answer the question. Required 1. Prepare a statement of cash flows for 20X2 in the format that best shows the relationship between net income and operating cash flow. The company sold no plant assets or long- DEXIA ENTERPRISES Comparative Income Statement Years Ended December 31, 20X2 and 20X1 Thousands 20X2 20X1 Revenues and gains: Sales revenue. 5452 $310 Gain on sale of equipment (sale price. $33) 18 Total revenues and gains. $452 $328 Expenses and losses: Cost of goods sold $221 $162 Salary expense 48 28 Depreciation expense. 46 22 Interest expense. 13 Amortization expense on patent.... 11 2= 20 Loss on sale of land (sale price. $61) 35 Total expenses and losses. 339 278 Net income $113 $ 50DEXIA ENTERPRISES Comparative Balance Statement December 31, 20X2 and 20X1 Thousands 20X2 20X1 Assets Cash $ 41 $ 63 Accounts receivable, net. 72 61 Inventories. 194 181 Long-term investments... 31 -0- Property, plant, and equipment. 361 259 Accumulated depreciation. (244) (198) Patents 177 188 Totals $632 $554 Liabilities and Owners' Equity Notes payable, short-term (for general borrowing). $ 32 $101 Accounts payable. 63 56 Accrued liabilities.. 12 17 Notes payable. long-term. 147 163 Common stock, no-par. 149 61 Retained earnings 229 156 Totals $632 $554 term investments and issued no notes payable during 20X2. The changes in all current accounts except short-term notes payable arose from operations. 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? In explaining the business's cash flows, identify two significant cash receipts that occurred during 20X1 but not in 20X2. Also point out the two largest cash payments during 20X2. 3. Considering net income and the company's cash flows during 20X2. was it a good year or a bad year? Give your reasons.