Mortonson Company has not yet prepared a formal statement of cash flows for the 2015 fiscal year. Comparative statements of financial position as of December 31, 2014 and 2015, and a statement of income and retained earnings for the year ended December 31, 2015, are presented as follows.

Instructions Prepare a statement of cash flows using the direct method. Changes in accounts receivable and accounts payable relate to sales and cost of goods sold.

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MORTONSON COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2015 (IN THOUSANDS) Sales revenue Expenses Cost of goods sold Salaries and benefits Heat, light, and power Depreciation Property taxes Patent amortization Miscellaneous expenses Interest Income before income taxes Income taxes Net income Retained earnings-Jan. 1, 2015 Share dividend declared and issued Retained earnings-Dec. 31, 2015 3,800 1,200 725 75 80 19 25 10 30 2,164 1,636 818 818 310 1,128 600 528