Martinez Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Martinez as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. MARTINEZ COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31 2020 2019 Current assets Cash $28,400 $20,100 Accounts receivable 75,800 58,400 Inventory 217,900 248,500 Prepaid expenses 8,900 7,100 Total current assets 331,000 334,100 Plant assets Plant assets 606,000 506,200 Less: Accumulated depreciationplant assets 149,900 124,200 Net plant assets 456,100 382,000 Total assets $787,100 $716,100 Current liabilities Accounts payable $123,900 $114,900 Salaries and wages payable 47,000 72,600 Interest payable 27,300 24,800 Total current liabilities 198,200 212,300 Long-term debt Bonds payable 70,000 100,000 Total liabilities 268,200 312,300 Stockholders equity Common stock, $10 par 370,000 280,000 Retained earnings 148,900 123,800 Total stockholders equity 518,900 403,800 Total liabilities and stockholders equity $787,100 $716,100 MARTINEZ COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020 Sales revenue $1,261,800 Cost of goods sold 719,000 Gross profit 542,800 Expenses Salaries and wages expense 252,400 Interest expense 75,400 Depreciation expense 25,700 Other expenses 8,100 Total expenses 361,600 Operating income 181,200 Income tax expense 43,400 Net income $137,800 The following is additional information concerning Martinezs transactions during the year ended May 31, 2020. 1. All sales during the year were made on account. 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing $99,800 were purchased by paying $29,800 in cash and issuing 7,000 shares of stock. 4. The other expenses are related to prepaid items. 5. All income taxes incurred during the year were paid during the year. 6. In order to supplement its cash, Martinez issued 2,000 shares of common stock at par value. 7. Cash dividends of $112,700 were declared and paid at the end of the fiscal year. (b) Prepare a statement of cash flows for Martinez Company for the year ended May 31, 2020, using the direct method. (A reconciliation of net income to net cash provided is not required.)