Neighborhood Supermarkets is preparing to go public, and you are asked to assist the firm by preparing its statement of cash flows for 20X1. Neighborhoods balance sheets at December 31, 20X0, and December 31, 20X1, and its income statement for the year ending December 31, 20X1, appear below.

Neighborhood Supermarkets, Inc.
Balance Sheet
	December 31,
($ in thousands)	20X1				20X0
Assets
Current:
Cash	$	91,000			$	59,351
Marketable securities		18,147				20,068
Accounts receivable, net		52,478				45,318
Inventories		228,515				187,433
Prepaid expenses		6,254				5,085
Total current assets		396,394				317,255
Property and equipment:
Land		86,193				86,003
Buildings and improvements		417,954				417,954
Equipment		673,570				646,427
Leasehold improvements		139,418				136,589
Accumulated depreciation		(815,060	)			(775,860	)
Total property and equipment		502,075				511,113
Goodwill		35,162				15,722
Intangibles and other		3,843				4,124
Total assets	$	937,474			$	848,214
Liabilities
Current:
Accounts payable	$	127,865			$	95,128
Accrued expenses		30,227				28,173
Accrued self-insurance		21,998				23,344
Deferred revenue		6,731				6,920
Income taxes payable		484				738
Total current liabilities		187,305				154,303
Noncurrent:
Notes payable		25,000				__
Postretirement benefit obligations		12,454				12,454
Deferred income taxes		22,544				20,357
Total noncurrent liabilities		59,998				32,811
Total liabilities		247,303				187,114
Stockholders Equity
Common stock		9,949				9,949
Retained earnings		826,473				795,473
Accumulated other comprehensive income		4,604				4,560
Treasury stock (at cost)		(150,855	)			(148,882	)
Total stockholders equity		690,171				661,100
Total liabilities and stockholders equity	$	937,474			$	848,214

Neighborhood Supermarkets, Inc.
Income Statement for the Year Ended December 31, 20X1
($ in thousands)
Net sales	$	2,516,364
Cost of sales		1,837,657
Gross profit		678,707
Depreciation expense		(47,201	)
Amortization expense		(6,207	)
Self-insurance expenses		(43,000	)
Loss on sale of equipment		(60	)
Operating, general, and administrative expenses		(486,665	)
Income from operations		95,574
Gain on sale of marketable securities		208
Investment income		1,556
Income before provision for income taxes		97,338
Provision for income taxes		(24,335	)
Net income	$	73,003

Additional Information:

1. The only entries in retained earnings for 20X1 were for net income and cash dividends.
2. During 20X1, bad debt expenses of $906 were included in operating, general, and administrative expenses; no accounts were written off.
3. Adjusting marketable securities upward by $68 led to the increase of $44 in accumulated other comprehensive income, after considering the deferred tax effect of $24.
4. On July 1, 20X1, Neighborhood Supermarkets bought land ($190) and equipment ($20,000), paying $10,190 in cash and issuing a $10,000 five-year note payable with interest at 6% payable annually. Accrued interest on the note was included in operating, general, and administrative expenses because the amount was deemed too immaterial to report separately.
5. No treasury stock was reissued during 20X1.
6. Equipment costing $9,052 with a book value of $1,051 was sold for cash.
7. A much smaller competitor was acquired on December 31, 20X1, for $34,890 cash and a 7%, $15,000 note that matures in two years. Neighborhood allocated the acquisition cost as follows: inventory, $5,500; intangibles, $5,926; equipment, $16,195; leasehold improvements, $2,829; goodwill, $19,440.

Required:

Use the indirect method to prepare Neighborhood Supermarkets statement of cash flows for 20X1. (Hint: Use the worksheet approach from the Chapter 4 appendix in your calculations.) (Enter your answers in thousands of dollars. Amounts to be deducted should be indicated with a minus sign.)