Question

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 amount of $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.

Answer 1

Solution is as under: