Prepare CASH FLOW STATEMENT
Liabilities 2010 2011
Equity Share Capital 500000 700000
P and l a/c 200000 350000
Bank Loan 100000 50000
Proposed Dividend 50000 70000
Provision 4 tax 30000 50000
Crs 55000 52000
Assets
Patents 100000 95000
Equipment 500000 500000
Investments - 100000
Drs 80000 147000
Stock 55000 130000
Bank 200000 300000
Additional info:-
During the year equipment costin 100000 was purchased.
Loss on sale of equipment 12000
18000 depreciation charged on equipment.
Cash Flow Statement | ||
Particulars | Amount (Rs) | Amount (Rs) |
(A) Cash Flow from Operating Activities |
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|
Profit for the year (3,50,000 – 2,00,000) | 1,50,000 |
|
Provision for Tax | 50,000 |
|
Proposed Dividend | 70,000 |
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Profit before Taxation | 2,70,000 |
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Add: Items to be Added: |
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Depreciation | 18,000 |
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Loss on Sale of Equipments | 12,000 |
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Patents Written off* | 5,000 |
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Less: Items to be Deducted: |
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Operating Profit before Working Capital Changes | 3,05,000 |
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Add: Decrease in Current Assets and Increase in Current Liabilities: |
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Less: Increase in Current Assets and Decrease in Current Liabilities: |
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Decrease in Creditors | (3,000) |
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Increase in Debtors | (67,000) |
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Increase in Stock | (75,000) |
|
Cash Generated from Operations | 1,60,000 |
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Less:Income Tax Paid | (30,000) |
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Cash used in Operating Activities | 1,30,000 | 1,30,000 |
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(B) Cash Flow from Investing Activities |
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Purchase of Equipments | (1,00,000) |
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Purchase of Investments | (1,00,000) |
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Proceeds from Sale of Equipments | 70,000 |
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Cash of Flow Investing Activities | (1,30,000) | (1,30,000) |
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(C) Cash Flow from Financing Activities |
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Proceeds from Issue of Equity Shares | 2,00,000 |
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Repayment of Bank Loan | (50,000) |
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Proposed Dividend Paid | (50,000) |
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Cash Flow from Financing Activities | 1,00,000 | 1,00,000 |
Net Decrease in Cash and Cash Equivalents (A+B+C) |
| 1,00,000 |
Add: Opening Cash and Cash Equivalents |
| 2,00,000 |
Closing Cash and Cash Equivalents |
| 3,00,000 |
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* Patents being an Intangible Assets are amortised by Rs 5,000 (1,00,000 - 95,000). Therefore added in Profit Before Taxation as non cash expenses under Cash from Operating Activities
Working Notes:
WN1
Equipment Account | |||
Dr. |
|
| Cr. |
Particulars | Amount (Rs) | Particulars | Amount (Rs) |
Balance b/d | 5,00,000 | Bank A/c (Sale) Balancing Figure | 70,000 |
Bank A/c (Purchase) | 1,00,000 | Depreciation A/c | 18,000 |
|
| Loss on Sale of Equipments | 12,000 |
|
| Balance c/d | 5,00,000 |
| 6,00,000 |
| 6,00,000 |
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