experts pls answer mine queries of cash flow statement:
practical problem : 41, 42, 43, 44 , 45 and 30 also. i need the solutions urgently.
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The answer to your questions are given below.
Q-41
Cash Flow Statement | ||
Particular | Amount | Amount |
(A) Cash Flow from Operating Activities |
|
|
Profit for the year (2,04,000 – 1,68,000) | 36,000 |
|
Add: Transfer to Reserve | 30,000 |
|
Add: Provision for Tax | 27,000 |
|
Add: Interim Dividend | 1,20,000 |
|
Add: Depreciation | 2,10,000 |
|
Less: Profit on Sale of Investment | (1,500) |
|
Less: Profit on Sale of Fixed Assets | (6,000) |
|
Operating Profit before Working Capital Change | 4,15,500 |
|
Add: Decrease in Stock | 90,000 |
|
Less: Decrease in Creditors | (1,02,000) |
|
Less: Increase in Debtors | (7,35,000) |
|
| (3,31,500) |
|
Less: Income Tax Paid | (2,22,000) |
|
Cash used in Operating Activities |
| (5,53,500) |
(B) Cash Flow from Investing Activities |
|
|
Purchase of Investment | (54,000) |
|
Rate of Investment | 25,500 |
|
Sale of Fixed Assets | 36,000 |
|
Cash of Flow Investing Activities |
| 7,500 |
(C) Cash Flow from Financing Activities |
|
|
Raising of Mortgaged Loan | 8,10,000 |
|
Interim Dividend | (1,20,000) |
|
Cash Flow from Financing Activities |
| 6,90,000 |
Net Increase in Cash and Cash Equivalents |
| 1,44,000 |
Add: Opening Balance of Bank |
| 4,47,000 |
Closing Balance of Bank |
| 5,91,000 |
|
|
|
Working Note:
W.N-1
Provision for Tax Account | |||
Particular | Amount | Particular | Amount |
Bank A/c (Tax Paid) | 2,22,000 | Balance b/d | 2,25,000 |
Balance c/d | 30,000 | Profit and Loss A/c (Prov made) | 27,000 |
| 2,52,000 |
| 2,52,000 |
|
|
|
|
W.N-2
Investment Account | |||
Particular | Amount | Particular | Amount |
Balance b/d | 1,50,000 | Bank A/c (Sale) | 25,500 |
Profit on Sale (25,500 – 24,000) | 1,500 |
|
|
Bank A/c (Purchase) | 54,000 | Balance c/d | 1,80,000 |
| 2,05,500 |
| 2,05,500 |
|
|
|
|
W.N-3
Fixed Assets Account | |||
Particular | Amount | Particular | Amount |
Balance b/d | 12,00,000 | Bank A/c (Sale) | 36,000 |
Profit on Sale (36,000 – 30,000) | 6,000 | Depreciation A/c (Bal Fig) | 2,10,000 |
|
| Balance c/d | 9,60,000 |
| 12,06,000 |
| 12,06,000 |
|
|
|
|
Q.42
Sol.
Cash Flow Statement | ||
Particular | Amount | Amount |
(A) Cash Flow from Operating Activities |
|
|
Profit for the year | 10,000 |
|
Add: Transfer to Reserve | 20,000 |
|
Add: Proposed Dividend | 30,000 |
|
Add: Depreciation | 50,000 |
|
Add: Preliminary Expenses written off | 7,000 |
|
Add: Interest on Debentures | 10,000 |
|
Operating Profit before Working Capital Changes | 1,27,000 |
|
Add: Increase in Creditor | 40,000 |
|
Less: Increase in Stock in Trade | (40,000) |
|
Less: Increase in Sundry Debtor | (18,000) |
|
Net Cash from Operating Activities |
| 1,09,000 |
(B) Cash Flow from Investing Activities |
|
|
Purchase of Fixed Assets | (1,00,000) |
|
Net Cash used in Investing Activities |
| (1,00,000) |
(C) Cash Flow form Financing Activities |
|
|
Issue of Share Capital | 40,000 |
|
Redemption of Debentures | (10,000) |
|
Interest on Debentures | (10,000) |
|
Proposed Dividend | (20,000) |
|
Cash form Financing Activities |
| Nil |
Net Increase in Cash & Cash Equivalents |
| 9,000 |
Add: Opening Balance of Cash & Cash Equivalents (3,000 + 40,000) |
| 43,000 |
Closing Balance of Cash & Cash Equivalent (2,000 + 50,000 ) |
| 52,000 |
|
|
|
Fixed Assets Account | |||
Particular | Amount | Particular | Amount |
Balance b/d | 3,60,000 | Depreciation | 50,000 |
Bank A/c (Purchase) | 1,00,000 | Balance c/d | 4,10,000 |
| 4,60,000 |
| 4,60,000 |
|
|
|
|
Q.43
Sol
Cash Flow Statement for the year ended March 31,2012 | ||
Particulars | Amount Rs | |
Cash Flow from Operating Activities |
|
|
Profit as per Profit and Loss Account | 100 |
|
Profit transfer to General Reserve | 10,000 |
|
Dividend | 23,000 |
|
Provision for Taxation | 33,000 |
|
Profit before Taxation | 66,100 |
|
Add: Item at to be added |
|
|
Depreciation on Machinery | 14,000 |
|
Depreciation on Building | 10,000 |
|
Profit before Working Capital Changes | 90,100 |
|
Add: Decrease in Current Assets: |
|
|
Decrease in Stock | 26,000 |
|
Decrease in Debtors | 15,800 |
|
Less: Decrease in Current Liabilities: |
|
|
Decrease in Creditors | (14,800) |
|
Cash Generated from Operation | 1,17,100 |
|
Less: Income Tax paid | (28,000) |
|
Cash from Operating Activities | 89,100 | 89,100 |
Cash Flow from Investing Activities |
|
|
Purchase of Goodwill | (5,000) |
|
Purchase of Plant and Machinery | (33,000) |
|
Cash used in Investing Activities | (38,000) | (38,000) |
Cash Flow from Financing Activities |
|
|
Proceeds from Issue of Shares | 50,000 |
|
Repayment of Bank Loan | (70,000) |
|
Dividend paid | (23,000) |
|
Net Cash used in Financing Activities | (43,000) | (43,000) |
Net Increase in Cash and Cash Equivalents |
| 8,100 |
Add: Opening Balance of Cash and Cash Equivalents |
| 500 |
Closing Balance of Cash and Cash Equivalents |
| 8,600 |
|
|
|
Working Note.
Provision for Taxation | |||||
Dr |
| Cr | |||
Particulars | Amount Rs | Particulars | Amount Rs | ||
Bank (Payment) | 23,000 | Balance b/d | 30,000 | ||
Balance c/d | 35,000 | Profit and Loss (Balance Figure) | 33,000 | ||
| 63,000 |
| 63,000 | ||
|
|
|
| ||
Plant and Machinery Account | |||||
Dr |
| Cr | |||
Particulars | Amount Rs | Particulars | Amount Rs | ||
Balance b/d | 1,50,000 | Depreciation | 14,000 | ||
Bank (Purchases) | 33,000 | Balance c/d | 1,69,000 | ||
| 1,83,000 |
| 1,83,000 | ||
|
|
|
| ||
Q.44
Sol.
Cash Flow Statement for the year ended March 31,2012 | ||
Particulars | Amount Rs | |
Cash Flow from Operating Activities |
|
|
Profit during the year 2011-12 | 2,16,000 |
|
Interim Dividend (4,05,000 × 15%) | 60,750 |
|
Preference Share Dividend | 21,600 |
|
Profit before Declaration of Dividend | 2,98,350 |
|
Add: Items to be added: |
|
|
Discount on Issue of Shares written off | 6,750 |
|
Depreciation on Fixed Assets | 81,000 |
|
Premium on Redemption of Preference Share (1,35,000 × 15%) | 20,250 |
|
Loss on Sale of Fixed Assets | 20,250 |
|
Debenture Interest | 10,800 |
|
Operating Profit before Working Capital Change | 4,37,400 |
|
Add: Increase in Current Assets | 1,08,000 |
|
Less: Increase in Current Liabilities | (1,35,000) |
|
Cash from Operating Activities | 4,10,400 | 4,10,000 |
Cash Flow from Investing Activities |
|
|
Purchase of Fixed Assets | (2,83,500) |
|
Purchase of Investments (1,08,000 – 40,500) | (67,500) |
|
Proceeds from Sale of Fixed Assets | 33,750 |
|
Cash used in Investing Activities | (3,17,250) | (3,17,250) |
Cash Flow from Financing Activities |
|
|
Proceeds from Issue of Share | 1,67,500 |
|
Proceeds from Issue of 8% Debenture | 1,35,000 |
|
Redemption of 8% Preference Share | (1,35,000) |
|
Premium on redemption of Preference Share | (20,250) |
|
Interim Dividend paid to equity shares | (60,750) |
|
Dividend paid to 8% Preference Share | (21,600) |
|
Interest paid on 8% Debentures | (10,800) |
|
Cash from financing Activities | 54,100 | 54,100 |
Net Increase in cash and Cash Equivalents |
| 1,47,250 |
Add: Opening balance of Cash |
| 54,000 |
Closing balance of Cash and Cash Equivalents |
| 2,01,250 |
|
|
|
Working Notes:
Fixed Assets Account | |||||
Dr |
| Cr | |||
Particular | Amount Rs | Particular | Amount Rs | ||
Balance b/d | 6,88,500 | Depreciation | 81,000 | ||
Bank (Purchase Balancing Figure) | 2,83,500 | Bank (Sale) | 33,750 | ||
|
| Profit and Loss (Loss) | 20,250 | ||
|
| Balance c/d | 8,37,000 | ||
| 9,72,000 |
| 9,72,000 | ||
|
|
|
|
Q-30
Cash Flow Statement for the year ended March 31,2012 | ||
Particular | Amount Rs | |
Cash Flow from Operating Activities |
|
|
Profit during the year 2011-12 | 28,000 |
|
Add Items to be Added: |
|
|
Loss on Sale of Machinery | 2,000 |
|
Depreciation on Machinery | 18,000 |
|
Operating profit before working Capital Charges | 48,000 |
|
Add Decrease in Current Assets and Increase in Current Liabilities |
|
|
Decrease in Stock | 15,000 |
|
Increase in Creditors | 4,000 |
|
Less: Increase in Current Assets |
|
|
Increase in Debtors | (20,000) |
|
Net Cash from Operating Activities | 47,000 | 47,000 |
Cash Flow from Investing Activities |
|
|
Purchase of Land | (15,000) |
|
Purchase of Building | (25,000) |
|
Proceeds from Sale of Machinery | 5,000 |
|
Net Cash used in Investing Activities | (35,000) | (35,000) |
Cash Flow from Financing Activities |
|
|
Repayment of Loan from X | (25,000) |
|
Loan from Bank | 10,000 |
|
Net Cash used in Financing Activities | 15,000 | (15,000) |
Net Decrease in cash and Cash Equivalents |
| (3,000) |
Add: Increase balance of Cash |
| 10,000 |
Closing balance of Cash and Cash Equivalents |
| 7,000 |
|
|
|
Working Note:
1- Purchase of Land = Closing balance – Opening balance
= 50,000 – 35,000
= Rs 15,000
2- Purchase of Building = Closing balance – Opening balance
= 60,000 – 35,000
= Rs 15,000
Machinery Account | |||||
Dr |
| Cr | |||
Particulars | Amount Rs | Particulars | Amount Rs | ||
Balance b/d | 80,000 | Bank (Sale) | 5,000 | ||
|
| Profit and Loss (Loss) | 2,000 | ||
|
| Depreciation (Balancing Figure) | 18,000 | ||
|
| Balance c/d | 55,000 | ||
| 80,000 |
| 80,000 | ||
|
|
|
|