The comparative balance sheets of Menachem Corporation at the beginning and end of the year 2012 appear below.

Net income of $34,000 was reported, and dividends of $23,000 were paid in 2012. New equipment was purchased and none was sold.Instructions(a) Prepare a statement of cash flows for the year 2012.(b) Compute the current ratio (current assets ÷ current liabilities) as of January 1, 2012, and December 31, 2012, and compute free cash flow for the year 2012.(c) In light of the analysis in (b), comment on Menachem??s liquidity and financialflexibility.

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MENACHEM CORPORATION BALANCE SHEETS Dec. 31, 2012 $ 22,000 106,000 37,000 (17,000) Jan. 1, 2012 Assets Inc./Dec. $ 13,000 $ 9,000 Inc. Cash Accounts recelvable 88,000 22,000 18,000 Inc. 15,000 Inc. 6,000 Inc. Equipment Less: Accumulated depreciation-equipment (11,000) $112,000 Total $148.000 Liabilities and Stockholders' Equity $ 15,000 $ 20,000 Accounts payable 5,000 Inc. Common stock 100,000 80,000 20,000 Inc. Retained earnings 28,000 17,000 11,000 Inc. $148,000 $112,000 Total