Sage Hill Inc.s CFO has just left the office of the company president after a meeting about the draft SFP at April 30, 2020, and income statement for the year then ended. (Both are reproduced below.) Our liquidity position looks healthy, the president had remarked. Look at the current and acid-test ratios, and the amount of working capital we have. And between the goodwill write off and depreciation, we have almost $23 million of non-cash expenses. I dont understand why youve been complaining about our cash situation. The CFO turns the draft financial statements over to you, the newest member of the accounting staff, along with extracts from the notes to the financial statements.

SAGE HILL INC. Consolidated Statement of Financial Position April 30, 2020, and 2019 (in $000s)
Assets			2020			2019
Cash and 60-day treasury bills			$3,267			$3,741
Accounts receivable			23,742			18,401
Inventory			26,078			21,566
Income tax receivable			145			0
Prepaid expenses			1,401			1,609
			54,633			45,317
Investments (Note 1)			5,957			6,959
Property, plant, and equipment (Note 2)			37,327			45,694
Deferred tax asset			4,878			2,269
Intangible assetsfranchises (Note 3)			4,391			1,911
Goodwill			0			12,748
			$107,186			$114,898
Liabilities
Current
	Bank overdraft (temporary)		$ 7,000			$ 6,311
	Accounts payable and accrued liabilities (Note 4)		3,243			4,712
	Current portion of long-term debt		1,800			1,200
			12,043			12,223
Long-term debt (Note 5)			14,900			14,500
Shareholders Equity
Share capital (Note 6)			78,257			62,965
Retained earnings			1,986			25,210
			80,243			88,175
			$107,186			$114,898

Consolidated Statement of Income and Retained Earnings Year Ended April 30, 2020, and 2019 (in $000s)
Revenue			2020			2019
	Sales revenue		$89,821			$68,820
	Interest and other		1,310			446
			91,131			69,266
Expenses
	Cost of goods sold		52,900			39,605
	General and administrative		10,415			10,982
	Salaries and wages expense		26,624			24,500
	Depreciation and amortization		10,220			11,709
	Loss on impairment (goodwill)		12,748			0
	Interest		1,289			1,524
	Loss on disposal of capital assets		395			0
			114,591			88,320
Loss before equity loss and income tax			(23,460	)		(19,054	)
Investment income (loss) (Note 1)			(2,518	)		100
Loss before income tax			(25,978	)		(18,954	)
Income tax benefit			2,754			5,161
Net loss			(23,224	)		(13,793	)
Retained earnings, beginning of year			25,210			39,003
Retained earnings, end of year			1,986			25,210

Draft Notes to the Financial Statements

For the Year Ended April 30, 2020

Note 1. Investments The companys investments at April 30 are as follows (in $000s):

			2020			2019
Compuco Ltd. (fair value 2020, $4.3 million)
	Associates shares, opening balance at equity		$6,959			$6,859
	Equity income (loss)		(2,518	)		100
	Associates shares, ending balance at equity		4,441			6,959
Other investments, at amortized cost			1,516			0
			$5,957			$6,959

Note 2. Property, Plant, and Equipment Additions to property, plant, and equipment for the current year amounted to $2,289,000. Proceeds from the disposal of property, plant, and equipment amounted to $250,000. Note 3. Intangible AssetsFranchises Franchise fees are amortized over the term of 20 years using the straight-line method. Note 4. Accounts Payable and Accrued Liabilities (in $000s)

			2020			2019
Accounts payablesuppliers			$3,102			$4,562
Salaries and wages payable			141			150
			$3,243			$4,712

Note 5. Long-Term Debt (in $000s)

			2020			2019
Debentures			$12,500			$12,500
Bank term loans, due April 30, 2021, principal repayable at $150,000 a month (2019, at $100,000 a month)			4,200			3,200
			16,700			15,700
Current maturities			(1,800	)		(1,200	)
			$14,900			$14,500

Debentures bear interest at 9% per annum and are due in 2022. Bank term loans bear interest at 8% and the bank advanced $2.2 million during the year. Note 6. Share Capital On September 14, 2019, Sage Hill Inc. issued 3.8 million shares with special warrants. Net proceeds from issuing the 3.8 million shares amounted to $14,393,000. Net proceeds from issuing the 3.8 million warrants amounted to $899,000. Assume that Sage Hill Inc. follows IFRS and has adopted the policy of classifying interest paid and dividends received as operating activities, and dividends paid as financing activities.

REQUIRED:

Prepare a statement of cash flows for the year ended April 30, 2020, on a non-comparative basis from the information provided. The CFO wants to use the direct method to report the companys operating cash flows this year. Include all required disclosures.