How to calculate the cash flows using indirect method rather than direct method

3 7 P23-3 (SCE-Direct Method) 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. MORTONSON COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2015 IN THOUSANDS) Sales revenue Expenses 3,800 Cost of goods sold Salaries and benefits Heat, light, and power Depreciation Property taxes Patent amortization 1,200 725 75 80 19 25 30 2,164 Income before income taxes Income taxes Net income Retained earnings-Jan. 1, 2015 1,636 818 818 1.128 600 Share dividend declared and issued Retained earnings-Dec. 31, 2015 E 528 Problems 1237 MORTONSON COMPANY COMPARATIVE STATEMENTS OF FINANCIAL POSITION As OF DECEMBER 31 IN THOUSANDS) 2015 2014 Equity investments (non-trading) Buildings and equipment Patents (less amortization) Accounts receivable E 10 150 910 E 50 70 600 (120) 130 560 500 100 105 780 Cash Total assets 2,808 1,890 Equity and Liabilities Share capital-ordinary Retained earnings 1.300 1,828 420 E 700 310 Total equity Long-term notes payable-due 2017 Accounts payable Income taxes payable Notes payable 1,010 200 330 Total liabilities Total equity and liabilities 2,808 1,890 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