Randell Limited is a fashion trading company located in Hong Kong. The firm prepare financial statements on a monthly basis. The following are the latest financial statements

Randell has recently hired an accounting trainee, Patrick Ko, who has prepared the statement of cash flow based on the financial statements above, along with the following information:

All property, plant and equipment acquired during the year are paid in cash. During the year, equipment was sold for $18,000 with a cost and net book value being $44,000 and $24,000 respectively.

• Randell has converted $200,000 of its bonds into common stock during the year.

• The firm has declared and paid a cash dividend in 2018.

After finishing preparing the statement of cash flows, Patrick was very happy knowing that he can reconcile the cash balance.

Required:

Using the following table, list the mistakes and suggest corrections on the statement of cash flows prepared by Patrick (an example is included here for your reference). Show working on your computations if any.

MISTAKES IN THE STATEMENT OF CASH FLOWS (SCF)	CORRECTION
The period coverage is missing from the SCF	Include For the Year ended December 31, 2018 as a heading under Statement of Cash Flows

Randell Limited Income Statement For the Year ended December 31, 2018 $ 818,000 $ 438,000 Sales Cost of goods sold Gross profit $ 380,000 $ 28,000 $ 298,000 Depreciation expense Selling, general and other admin expenses Income from operations Less: $ 54,000 $ 6,000 Loss on equipment sale $ 48,000 $ 24,000 $ 24,000 Income before income taxes Income tax expense Net Income Randell Limited Comparative Statement of Financial Position As at December 31 2018 2017 115,000 Cash 31,000 Term Deposits (60-days) 5,000 49,000 Accounts receivable 110,000 96,000 53,000 37,000 Inventory Prepaid expenses 30,000 95,600 40,000 57,600 Land 2$ Building Less: Acc. depreciation 200,000 200,000 184,000 (34,000) 166,000 (16,000) Equipment Less: Acc. depreciation 116,000 160,000 86,000 120,000 (30,000) (40,000) Total Assets 660,600 614,600 Accounts payable Bonds payable 49,000 75,300 200,000 200,000 165,600 2$ Common stock 400,000 Retained earnings 185,300 Total Liabilities and Equity 660,600 614,600 Randell Limited Statement of Cash Flows Cash flows from financing activities Increase in accounts payable $ 26,300 $ 26,300 Net cash provided by financing activities Cash flows from operating activities Increase in retained earnings $ 19,700 Adjustments to net cash provided by operating activities: Increase in accounts receivable Decrease in prepaid expenses Sale of equipment $ 14,000 10,000 $(18,000) 6,000 $ 25,700 Net cash provided by operating activities Cash flows from investing activities Purchase of land Loss on sale of equipment $ 38,000 (6,000) $ 32,000 $ 84,000 Net cash provided by investing activities Net increase in cash $ 31,000 $ 115,000 Cash at beginning of period Cash at end of period