How can I do this source transformation/Reduce this circuit?
This looks like homework so I'm not going to give you a full solution, but I will tell you that the next step is to convert the 4A current source with parallel resistor into a voltage source with series resistor.

EDIT: After getting a 2A current source in parallel with 20 ohms, the next step is to combine the 2A and 1A sources. Current sources in parallel add, just like voltage sources in series.

By the way, the voltage is 40V, not 4V.