acct 461181

KRUG INC.

Comparative Balance Sheets

December 31, 2012 and 2011

2012 2011

Assets

Cash $ 26,400 $ 30,550

Accounts receivable, net 14,050 12,150

Inventory 90,100 70,150

Equipment 49,900 44,500

Accum. depreciation”Equipment (22,500 ) (18,300 )

Total assets $ 157,950 $ 139,050

Liabilities and Equity

Accounts payable $ 23,350 $ 25,400

Salaries payable 1,050 600

Common stock, no par value 107,000 100,000

Retained earnings 26,550 13,050

Total liabilities and equity $ 157,950 $ 139,050

KRUG INC.

Income Statement

For Year Ended December 31, 2012

Sales $ 47,575

Cost of goods sold (17,950 )

Gross profit 29,625

Operating expenses

Depreciation expense $ 4,200

Other expenses 8,550

Total operating expense 12,750

Income before taxes 16,875

Income taxes expense 3,375

Net income $ 13,500

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 in 2012.

1. Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2012, using the indirect method. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)