Presented below are the 2016 income statement and comparative balance sheets for Santana Industries, SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2016 ($ in thousands) Sales revenue 17.050 $ Service revenue 6.200 $ 23,250 Total revenue Operating expenses Cost of goods sold Selling General and administrative 8.600 3.800 2.900 Total operating expenses 15,300 7.950 340 Operating income Interest expense Income before income taxes Income tax expense 7610 3,900 Net income $ 3,710 Balance Sheet Information (S in thousands) Dec. 31. Dec. 31 2016 2015 Assets: Cash Accounts receivable Inventory Prepaid rent Plant and equipment Less: Accumulated depreciation $ 8,750 $ 3,460 5,300 3,600 6.800 4.400 290 580 17,300 14,800 (6,500) (5,900) Total assets $31.940 $20.940 W - Part 2 Liabilities and Shareholders' Equity: Accounts payable Interest payable Deferred service revenue Income taxes payable Loan payable (due 12/31/2015) Common stock Retained earnings $ 4,200 $ 2.500 240 0 1,080 740 690 1,080 7,800 0 11,400 11,400 6,530 5,220 Total liabilities and shareholders' equity $31.940 $20.940 Additional information for the 2016 fiscal year ($ in thousands): 1 Cash dividends of $2,400 were declared and paid 2. Equipment costing $6,800 was purchased with cash. 3. Equipment with a book value of $1,900 (cost of $4,300 less accumulated depreciation of $2.400) was sold for $1,900. 4. Depreciation of $3,000 is included in operating expenses Required: Prepare Santana Industries' 2016 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.) SANTANA INDUSTRIES Statement of Cash Flows For the Year Ended December 31, 2016 (S in thousands) Cash flows from operating activities Net Income $ 3,710 3,000 Adjustments for noncash effects Depreciation expense Decrease in income taxes payable Increase in accounts receivable Increase in accounts payable Increase in inventory SANTANA INDUSTRIES Statement of Cash Flows For the Year Ended December 31, 2016 (S in thousands) Cash flows from operating activities Net Income $ 3.710 3,000 Adjustments for noncash effects Depreciation expense Decrease in income taxes payable Increase in accounts receivable Increase in accounts payable Increase in Inventory Increase in interest payable Increase in deferred service revenue $ 6.710 Net cash flows from operating activities Cash flows from investing activities Purchase of equipment Sale of equipment Net cash flows from investing activities Cash flows from financing activities Proceeds from loan payable Payment of dividends 0 6,710 Net cash flows from financing activities Net decrease in cash Cash, January 1 Cash, December 31 $ 6,710
