P23.3 (LO 2) (SCFDirect Method) Mortonson Company has not yet prepared a statement of cash flows for the 2020 fiscal year. Comparative balance sheets as of December 31, 2019 and 2020, and a statement of income and retained earnings for the year ended December 31, 2020, are presented as follows.

Mortonson Company Statement of Income and Retained Earnings For the Year Ended December 31, 2020 ($000 omitted)
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 earningsJan. 1, 2020				310
				1,128
Stock dividend declared and issued				600
Retained earningsDec. 31, 2020				$528

Mortonson Company Comparative Balance Sheets As of December 31 ($000 omitted)
Assets		2020		2019
Current assets
Cash		$333		$100
U.S. Treasury notes (available-for-sale)		10		50
Accounts receivable		780		500
Inventory		720		560
Total current assets		1,843		1,210
Long-term assets
Land		150		70
Buildings and equipment		910		600
Accumulated depreciationbuildings and equipment		(200)		(120)
Patents (less amortization)		105		130
Total long-term assets		965		680
Total assets		$2,808		$1,890
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$420		$330
Income taxes payable		40		30
Notes payable		320		320
Total current liabilities		780		680
Long-term notes payabledue 2022		200		200
Total liabilities		980		880
Stockholders' equity
Common stock		1,300		700
Retained earnings		528		310
Total stockholders' equity		1,828		1,010
Total liabilities and stockholders' equity		$2,808		$1,890

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. Do not prepare a reconciliation schedule.