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Item3

Item 3 12.5 points

Presented below are the 2021 income statement and comparative balance sheets for Santana Industries.

SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2021 ($ in thousands)
Sales revenue	$	14,850
Service revenue		4,000
Total revenue				$	18,850
Operating expenses:
Cost of goods sold		7,500
Selling expense		2,700
General and administrative expense		1,800
Total operating expenses					12,000
Operating income					6,850
Interest expense					180
Income before income taxes					6,670
Income tax expense					1,900
Net income				$	4,770

Balance Sheet Information ($ in thousands)	Dec. 31, 2021				Dec. 31, 2020
Assets:
Cash	$	8,600			$	2,470
Accounts receivable		3,100				2,500
Inventory		4,600				3,300
Prepaid rent		180				360
Equipment		15,100				12,600
Less: Accumulated depreciation		(5,400	)			(4,800	)
Total assets	$	26,180			$	16,430
Liabilities and Shareholders Equity:
Accounts payable	$	2,000			$	1,400
Interest payable		130				0
Deferred revenue		860				630
Income taxes payable		580				860
Notes payable (due 12/31/2023)		5,600				0
Common stock		10,300				10,300
Retained earnings		6,710				3,240
Total liabilities and shareholders' equity	$	26,180			$	16,430

Additional information for the 2021 fiscal year ($ in thousands):

1. Cash dividends of $1,300 were declared and paid.
2. Equipment costing $4,600 was purchased with cash.
3. Equipment with a book value of $800 (cost of $2,100 less accumulated depreciation of $1,300) was sold for $800.
4. Depreciation of $1,900 is included in operating expenses.

Required: Prepare Santana Industries' 2021 statement of cash flows, using the indirect method to present cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.)