Fool’s Paradise Ltd had cash and cash equivalents at 1 January 2019 of $400,000. The transactions of Fool’s Paradise Ltd for the year to 31 December 2019 are as follows:Borrowed $850,000 with a 9-month loan payableReceived $6,340,000 cash for customer accountsSold for $360,000 cash a plant asset with a carrying amountof $180,000Issued ordinary shares for $480,000 cashPurchased a plant asset for $650,000; $237,500 in cash and $412,500 in loanExchanged 60,000 shares for land with a fair value of $1,000,000Received a $350,000 dividend in cashReceived $25,000 interest from term depositInvested $500,000 cash on the short-term money marketPaid fixed-term loan principal of $900,000 and interest of $90,000Cash payments for supplier’s accounts $6,300,000Dividend paid during the period $200,000Wages expense shown in the income statement is $75,000. At the end of the year the balance sheet shows prepaid Wages expense of $65,000. There was a prepaid Wages expense of $35,000 at the beginning of the year.Required:Prepare the statement of cash flows of Fool’s Paradise Ltd for the year to 31 December 2019.

Statement of Cash Flow of Fool's paradise Ltd for the year to December 31 , 2019.

Answered: Fool’s Paradise Ltd had cash and cash…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter21: The Statement Of Cash Flows

Section: Chapter Questions

Problem 13P: Comprehensive The following are Farrell Corporations balance sheets as of December 31, 2019, and...

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Fool’s Paradise Ltd had cash and cash equivalents at 1 January 2019 of $400,000. The transactions of Fool’s Paradise Ltd for the year to 31 December 2019 are as follows:

Borrowed $850,000 with a 9-month loan payable
Received $6,340,000 cash for customer accounts
Sold for $360,000 cash a plant asset with a carrying amountof $180,000
Issued ordinary shares for $480,000 cash
Purchased a plant asset for $650,000; $237,500 in cash and $412,500 in loan
Exchanged 60,000 shares for land with a fair value of $1,000,000
Received a $350,000 dividend in cash
Received $25,000 interest from term deposit
Invested $500,000 cash on the short-term money market
Paid fixed-term loan principal of $900,000 and interest of $90,000
Cash payments for supplier’s accounts $6,300,000
Dividend paid during the period $200,000
Wages expense shown in the income statement is $75,000. At the end of the year the balance sheet shows prepaid Wages expense of $65,000. There was a prepaid Wages expense of $35,000 at the beginning of the year.

Required:

Prepare the statement of cash flows of Fool’s Paradise Ltd for the year to 31 December 2019.

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

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