Use the following financial statements and additional information to (1) prepare a statement of cash flows for the year ended December 31, 2018, 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 2018.
b. Issued additional stock for $10,000 cash in 2018.
c. Purchased equipment for cash in 2018; no equipment was sold in 2018.

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MONTGOMERY INC. Comparatlve Balance Sheets December 31, 2018 and 2017 2018 2017 S 30,400 30,550 12,150 90,100 70.150 130,550 112,850 49,900 41,500 (22,500) (15,300 $157,950 $139,050 Accounts receivable, net 10,050 Total current assets Equipment. Accum. depreciation Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity S 23,900 25,400 500600 26,000 24,400 110,000 100,000 13.050 . $157,950 $139,050 23,550 MONTGOMERY INC. Income Statement For Year Ended December 31,2018 $45,575 Sales Cost of goods sold Gross profit Operating expenses (18,950) 26,625 $7,200 5,550 Depreciation expense Other expenses Total operating expense Income before taxes. Income tax expense Net income 12,750 13,875 3,375 $10,500