Prepare a Statement of Cash Flows of Thinker Company for the month ended 31st March 2020 using the DIRECT method.

QUESTION 1 (25 MARKS) The Thinker Company reports its current financial statements as follows. Thinker Company Balance Sheet as at $ $ Assets 31st March 2020 29th February 2020 Non-current assets 58 000 30 000 Delivery van Accumulated depreciation Investment in Milano Incorporation (3 400) (5 400) 43 000 43 000 Land and building 250 000 250 000 Current assets Inventories 26 000 28 000 Accounts receivable 19 300 28 850 34 300 9 400 Cash and cash equivalents Prepaid electricity expense 250 100 Total assets 425 450 385 950 Liabilities and Stockholders' Equity Current liabilities 12 000 9 000 Accounts payable Accrued wages payable 700 1 100 Long-term liabilities 6% Notes Payable 104 000 85 000 Stockholders' equity Paid-in capital Retained earnings 277 850 286 550 30 900 4 300 Total liabilities and stockholders' equity 425 450 385 950 2 Thinker Company Income Statement for the Month Ended 31st March 2020 $ $ Sales revenue 283 200 Less: Cost of Goods Sold (144 900) Gross Profit 138 300 57 000 Less: Expenses Wages Electricity Depreciation Administration 6 200 2 000 38 000 (103 200) 35 100 Add: Other Revenue Commission received 500 Net Profit 35 600 Additional information: 1. Cash sales for the month of March 2020 are $87 000. 2. No disposal of delivery van made during March 2020. 3. Notes payable worth of S6 000 was due and paid during March 2020. 4. No issuance of new shares made during March 2020. 3