The 20x8 comparative income statement and the 20x8 comparative balance sheet of Golf America, Inc. have just been distributed at a meeting of the company's board of directors. The members of the board raise a fundamental question: Why is the cash balance so low? This question is especially hard to understand because 20x8 showed record profits. As the controller of the company, you must answer the question GOLF AMERICA, INC. Comparative Income Statement Year Ended December 31, 20X8 in thousands) 20X8 $ 444 221 223 20X7 $ 310 162 148 48 46 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: Salaries Expense Depreciation Expense Total Operating Expenses Operating Income Other Income and (Expenses) Gain on Sale of Equipment (sales price, 533) Loss on Sale of Land (sales price, 561) Interest Expense Amortization Expense Total Other Income and (Expenses) Net Income 28 22 50 98 94 129 0 0 (13) (11) 18 (35) (20) (11) (48) $ 50 S 105 GOLF AMERICA, INC. Comparative Balance Sheet December 31, 20X8 and 20X7 (in thousands) 20X8 20X7 $ 25 72 194 5 63 61 181 Assets Current Assets: Cash Accounts Receivable Merchandise Inventory Long-term Assets: Plant Assets, net Patents Long-term Investments Total Assets 61 125 177 31 $ 624 188 0 $ 554 Liabilities Current Liabilities: Accounts Payable Accrued Liabilities Long-term Liabilities: Notes Payable Total Liabilities $ 63 12 $ 56 17 264 179 254 337 Liabilities Current Liabilities: Accounts Payable Accrued Liabilities Long-term Liabilities: Notes Payable Total Liabilities $ 63 12 $ 56 17 179 254 264 337 Stockholders' Equity Common Stock, no par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 149 221 370 $ 624 61 156 217 S 554 Requirements 1. Prepare a statement of cash flows for 20x8 in the format that best shows the relationship between net income and net cash flows from operating activities. The company sold no plant assets or long-term investments and issued no notes payable during 20X8. There were no non-cash investing and financing transactions during the year. Show all amounts in thousands 2. Considering net income and the company's cash flows during 20X8, was it a good year or a bad year? Give your reasons