FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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 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 a term deposit
Invested $500,000 cash on the short-term
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
Required:
Prepare the statement of
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- Fool’s Paradise Ltd had cash and cash equivalents at 1 January 2019 of $400,000. The transactions ofFool’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 balancesheet shows prepaid Wages expense of $65,000. There was a prepaid Wages expense of…arrow_forwardBirch Company is considering purchasing EKC Company. EKC's balance sheet at December 31, 2019, is as follows: Cash $51,000 Current liabilities $56,000 Accounts receivable 76,000 Bonds payable 194,000 Inventory 130,000 Common stock 290,000 Property, plant, and equipment (net) 630,000 Retained earnings 347,000 $887,000 $887,000 At December 31, 2019, Birch discovered the following about EKC: No allowance for uncollectible accounts has been established. An allowance of $5,200 is considered appropriate. The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Birch. The FIFO inventory valuation of the December 31, 2019, ending inventory would be $181,000. The fair value of the property, plant, and equipment (net) is $780,000. The company has an unrecorded patent that is worth $100,000. The book values of the current liabilities and bonds payable are the same as their market values. Required: 1. Compute the value…arrow_forward
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