Question 3 The following are financial statements of Murenda Ltd: Murenda Ltd Statement of Financial Position, at December 31: 2019 shs Assets 95,800 Cash 42.000 Accounts receivable (net) Inventory 86,800 Prepaid expenses 6,400 Furniture 140,600 Ace, depreciation - furniture (48,600) 323.000 total assets Liabilities and Equity Accounts payable 16000 Wages payable 10000 Income taxes payable 2400 Notes payable (long-term) 30000 Ord.shares, sh 5.00 par value 230000 Retained earnings 34600 323000 2018 shs 25.000 52,000 96,800 5.200 120,000 (10,000) 289.000 22000 6000 3600 70000 180000 7400 289000 468,000 312.000 156,000 Murenda Ltd Statement of Comprehensive Income For the period endend December 31, 2019 Sales Cost of goods sold Gross profit Operating expenses: Depreciation expenses 38,600 Wages and other expenses 57,000 Income before taxes Income taxes Net income Note: All sales and purchases are on credit. Required a) Statement of cash flows using the indirect method. (10 marks) b) Statement of cash flows using the direct method. (10 marks) 95,600 60,400 24,600 35,800