9 Presented below are the 2018 income statement and comparat

9 Presented below are the 2018 income statement and comparative balance sheets for Santana Industries SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in thousands) 10 points Sales revenue Service revenue 17,050 6,200 Total revenue $23,250 eBook Operating expenses: Cost of goods sold Selling General and administrative 8,600 3,800 2,900 Print 15,300 7,950 340 7,610 3,900 3,710 Total operating expenses Operating income Interest expense Income before income taxes Income tax expense Net income References Dec. 31, Dec. 31, 2018 2017 Balance Sheet Information ($ in thousands) Assets: Cash Accounts receivable Inventory Prepaid rent Plant and equipment $ 8,750 3,460 3,600 4,400 580 14,800 (6,500) (5,900 $31,940 $20,940 5,300 6,800 290 17,300 Less: Accumulated depreciation Total assets Liabilities and Shareholders Equity: Accounts payable Interest payable Deferred service revenue Income taxes payable Loan payable (due 12/31/2020) Common stock Retained earnings $ 4,200 2,500 240 1,080 690 7,800 11,400 6,530 740 1,080 11,400 5,220 $31,940 $20,940 Total liabilities and shareholders\' equity

Solution

SANTANA INDUSTRIES Statement of cash flows For the year ended december 31,2018 Cash flow from operating activities net income for the year 3,710 Adjustments to reconcile net income to cash from operating activities Depreciation expense 3,000 increase in accounts receivable -1700 increase in inventory -2400 decrease in prepaid rent 290 increase in accounts payable 1700 increase in interest payable 240 increase in deferred service revenue 340 decrease In income taxes payable -390 net cash flow from operating activities 4,790 Cash flow from investing activities cash from sale of Equipment 1,900 purchase of Equipment -6,800 net cash outflow from investing activities -4,900 Cash flow from financing activities cash from loan payable 7,800 cash dividend -2,400 net cash flow from financing activities 5,400 Net increase in cash 5,290 Cash at the beginning 3,460 cash at year end 8,750