Use the following financial statements and additional information to
(1) Prepare a statement of cash flows for the year ended December 31, 2012, using the indirect method, and
(2) Analyze and briefly discuss the statement prepared in part 1 with special attention to operating activities and to the company€™s cash level.

Additional Information
a. No dividends are declared or paid in 2012.
b. Issued additional stock for $7,000 cash in 2012.
c. Purchased equipment for cash in 2012; no equipment was sold in2012.

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KRUG INC. Comparative Balance Sheets December 31,2012 and 2011 2012 2011 Assets Cash Accounts recelvable, net Inventory Equipment Accum. depreclation Equipment22.500(18.300 KRUG INC. Income Statement For Year Ended December 31,2012 $26,400 30,550 14,050 90,100 49,900 2,150 70,150 44,500Sales $47,575 17,950) 29.625 Cost of goods sold Operating expenses Other expenses Total assets $157,950 $139,050 Gross profit $4,200 8,550 Depreclation expense Liabilities and Equity Accounts payable Salarles payable Common stock, no par value Retalned earnings Total lablitles and equlty $23,350 25,400 1,050 . 107,000 26,550 2,750 16,875 3,375 $13,500 Total operating expense 600 00,000 Income before taxes 13,050Income tax expense $157950 39,050 Net Income