Mortonson plc has not yet prepared a formal statement of cash flows for the 2022 fiscal year. Comparative statements of financial position as of December 31, 2021 and 2022, and a statement of income and retained earnings for the year ended December 31, 2022, 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 plc Statement of Income and Retained Earnings For the Year Ended December 31, 2022 (in thousands) Sales revenue £3,800 Expenses Cost of goods sold £1,200 Salaries and benefits 725 Heat, light, and power 75 Depreciation 80 Property taxes 19 Patent amortization 25 Miscellaneous expenses 10 Interest 30 2,164 Income before income taxes 1,636 Income taxes 818 Net income 818 Retained earnings-Jan. 1, 2022 310 1,128 Share dividend declared and issued 600 Retained earnings-Dec. 31, 2022 £ 528