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Question 30:

From the following information, calculate Cash Flow from Investing Activities:

 Particulars 31st March, 2019 (â‚¹) 31st March, 2018 (â‚¹) Machinery (At cost) 5,50,000 5,00,000 Accumulated Depreciation 1,70,000 1,00,000

During the year, a machinery costing â‚¹ 50,000 (accumulated depreciation provided thereon â‚¹ 20,000) was sold for â‚¹ 26,000.

 Cash Flow from Investing Activities Particulars Amount (â‚¹) Amount (â‚¹) Purchase of Machinery (1,00,000) Sale of Machinery 26,000 Net Cash Used in Investing Activities (74,000)

Working Notes:

 Machinery Account Dr. Cr. Particulars Amount (â‚¹) Particulars Amount (â‚¹) To Balance b/d 5,00,000 Accumulated Depreciation A/c 20,000 To Bank A/c (Purchase- Bal. Fig.) 1,00,000 Bank A/c (Sale) 26,000 Profit and Loss A/c (Loss on Sale) 4,000 Balance c/d 5,50,000 6,00,000 6,00,000

 Accumulated Depreciation Account Dr. Cr. Particulars Amount (â‚¹) Particulars Amount (â‚¹) To Machinery A/c 20,000 Balance b/d 1,00,000 Balance c/d 1,70,000 Profit and Loss A/c (Dep. charged during the year- Bal. Fig.) 90,000 1,90,000 1,90,000

Question 31:

From the following particulars, calculate Cash Flow from Investing Activities

 Particulars Purchased (â‚¹) Sold (â‚¹) Machinery 6,20,000 2,00,000 Investments 2,40,000 80,000 Goodwill 1,00,000 ... Patents ... 1,50,000
1. Interest received on debentures held as investment â‚¹ 8,000.
2. Interest paid on debentures issued â‚¹ 20,000.
3. Dividend received on shares held as investment â‚¹ 20,000.
4. Dividend paid on Equity Share Capital â‚¹ 30,000.
5. A plot of land was purchased out of the surplus funds for investment purposes and was let out for commercial use. Rent received â‚¹ 50,000 during the year.

 Cash Flow from Investing Activities Particulars Amount (Rs) Amount (Rs) Purchase of Machinery (6,20,000) Purchase of Investments (2,40,000) Purchase of Goodwill (1,00,000) Sale of Machinery 2,00,000 Rent Received 50,000 Dividend Received 20,000 Sale of Investments 80,000 Interest on Debentures 8,000 Sale of Patents 1,50,000 Net Cash Used in  Investing Activities (4,52,000)

Note: Dividend paid and interest paid is a part of Financing Activities.

Question 32:

From the following information, calculate Cash Flow from Financing Activities:

 1st April, 2018 (â‚¹) 31st March, 2019 (â‚¹) Long-term Loan 2,00,000 2,50,000

During the year, the company repaid a loan of â‚¹1,00,000.

 Cash Flow Statement Particulars Amount (â‚¹) Amount (â‚¹) Cash Flow from Financing Activities Loan Repaid (1,00,000) New Loan Raised 1,50,000 50,000 Cash Flows from Financing Activity 50,000

Working Notes:
 Long Term Loan Account Dr. Cr. Particulars Amount (â‚¹) Particulars Amount (â‚¹) Bank A/c (Repayment of Loan) 1,00,000 Balance b/d 2,00,000 Balance c/d 2,50,000 Bank A/c (Loan Raised) 1,50,000 3,50,000 3,50,000

Question 33:

From the following information, calculate Cash Flow from Financing Activities:

 Particulars 31st March, 2019 (â‚¹) 31st March, 2018 (â‚¹) Equity Share Capital 10,00,000 9,00,000 Securities Premium Reserve 2,60,000 2,50,000 12% Debentures 1,00,000 1,50,000

Additional Information: Interest paid on debentures â‚¹ 18,000.

 Cash Flow from Financing Activities Particulars Amount (â‚¹) Amount (â‚¹) Proceeds from Issue of Equity Shares 1,10,000 Redemption of 12% Debentures (50,000) Interest Paid (18,000) Net Cash Flows from Financing Activities 42,000

Question 34:

From the following extracts of Balance Sheet of Exe Ltd., calculate Cash Flow from Financing Activities:

 Particulars 31st March, 2019 (â‚¹) 31st March, 2018 (â‚¹) Equity Share Capital 5,25,000 4,00,000 10% Preference Share Capital 4,00,000 5,50,000 Securities Premium Reserve 2,25,000 1,00,000 12% Debentures 4,00,000 3,00,000

1. Equity Shares were issued on 31st March, 2019.
2. Interim dividend on Equity Shares was paid @ 15%.
3. Preference Shares were redeemed on 31st March, 2019 at a premium of 5%. Premium paid was debited to Statement of Profit and Loss.
4. 12% Debentures of face value â‚¹ 1,00,000 were issued on 31st March, 2019.

 Cash Flow from Financing Activities for the year ended March 31, 2019 Particulars Amount (â‚¹) Amount (â‚¹) Issue of Shares 1,25,000 Transfer to Securities Premium Reserve 1,25,000 Issue of Debentures 1,00,000 Premium on redemption of Preference Shares (5% of 1,50,000) (7,500) Interim Dividend Paid(15% of 4,00,000) (60,000) Redemption of Preference Share Capital (1,50,000) Interest on Debentures (12% of 3,00,000) (36,000) Interest on Preference Share Capital (55,000) Net Cash Flow from Financing Activities 41,500

Question 35:

From the following information, calculate Cash Flow from Investing and Financing Activities:

 Particulars 31st March 2019 (â‚¹) 31st March 2018 (â‚¹) Machinery (At cost) 50,000 40,000 Accumulated Depreciation 12,000 10,000 Capital 35,000 30,000 Bank Loan ... 10,000

During the year, a machine costing â‚¹ 10,000 was sold at a loss of â‚¹ 2,000. Depreciation on machinery charged during the year amounted to â‚¹ 6,000.

 Cash Flow Statement for the year ended March 31, 2019 Particulars Amount (â‚¹) Amount (â‚¹) Cash Flow from Investing Activities Purchase of Machinery (20,000) Sale of Machine 4,000 Net Cash from (used in) Investing Activities (16,000) Cash Flow from Financing Activities Proceeds from Issue of Equity Shares 5,000 Repayment of Bank Loan (10,000) Net Cash from (used in) Financing Activities (5,000)

Working Notes:

 Machinery Account Dr. Cr. Particulars Amount (â‚¹) Particulars Amount (â‚¹) Balance b/d 40,000 Accumulated Depreciation A/c 4,000 Bank A/c (Purchase- Bal. Fig.) 20,000 Bank A/c (Sale) 4,000 Profit and Loss A/c (Loss on Sale) 2,000 Balance c/d 50,000 60,000 60,000

 Accumulated Depreciation Account Dr. Cr. Particulars Amount (â‚¹) Particulars Amount (â‚¹) To Machinery A/c (Bal. Fig.) 4,000 Balance b/d 10,000 Balance c/d 12,000 By Profit and Loss A/c (Dep. charged during the year) 6,000 16,000 16,000

Question 36:

From the following information, calculation Cash Flow from Operating Activities and Investing Activities:

 Particular 31st, March, 2018, (â‚¹) 31st, March, 2019, (â‚¹) Surplus, i.e., Balance in Statement of Profit and Loss 2,50,000 10,00,000 Provision for Tax 75,000 75,000 Trade Payables 1,00,000 3,75,000 Current Assets (Trade Receivables and Inventories) 11,50,000 13,00,000 Fixed Assets (Tangible) 21,25,000 23,30,000 Accumulated Depreciation 10,62,500 11,00,000

1. A machine having book value of â‚¹ 1,00,000 (Depreciation provided thereon â‚¹ 1,62,500) was sold at a loss of â‚¹ 20,000.
2. Tax paid during the year â‚¹ 75,000.

 Cash flow Statement for the year ended 31st March, 2019 Particulars Amount (â‚¹) Amount (â‚¹) A. Cash Flow from Operating Activities Net Profit as per Statement of Profit & Loss 7,50,000 Add: Provision for Tax made 75,000 Net Profit before Tax and Extraordinary Items 8,25,000 Add: Depreciation charged during the year 2,00,000 Add: Loss on Sale of Machine 20,000 Net Profit before working Capital changes 10,45,000 Add: Increase in Trade Payables 2,75,000 Less: Increase in Current Assets (1,50,000) Net Profit before Tax 11,70,000 Less: Tax Paid during the year 75,000 Cash Flow from Operating Activities 10,95,000 B. Cash flow from Investing Activities Purchase of Fixed Asset (4,67,500) Sale of Machine 80,000 Cash used in Investing Activities 3,87,500

 Dr. Accumulated Depreciation A/c Cr. Date Particulars Amount (â‚¹) Date Particulars Amount (â‚¹) 2019 2018 March 31 To Fixed Asset A/c (Depreciation on Mach. Sold) 1,62,500 April 01 By Balance b/d 10,62,500 March 31 To balance c/d 11,00,000 By Statement of Profit & Loss A/c (Bal. Fig.) 2,00,000 12,62,500 12,62,500

 Dr. Fixed Assets A/c Cr. Date Particulars Amount (â‚¹) Date Particulars Amount (â‚¹) 2018 2019 April 01 To balance b/d 21,25,000 March 31 By Accumulated Depreciation A/c 1,62,500 2019 March 31 By Statement of Profit & Loss A/c- Loss 20,000 March 31 By Bank A/c (1,00,000 – 20,000) 80,000 March 31 To Cash/Bank A/c 4,67,500 March 31 By balance c/d 23,30,000 25,92,500 25,92,500

Question 37:

XYZ. Ltd. provided the following information, calculate Net Cash Flow from Financing Activities:

 Particular 31st March, 2019 (â‚¹) 31st March, 2018  (â‚¹) Equity Share Capital 12,00,000 10,00,000 12% Debentures 2,00,000 1,00,000

1.Interest paid on debentures â‚¹ 19,000.
2. Dividend paid in the year â‚¹ 50,000.
3. During the year, XYZ Ltd. issued bonus shares in the ratio of 5 : 1 by captialising reserve.

 Cash Flow from Financing Activities Particulars Amount (â‚¹) Amount (â‚¹) Proceeds from Issue of 12% Debentures 1,00,000 Interest Paid (19,000) Dividend Paid (50,000) Net Cash Flows from Financing Activities 31,000

Note: Amount of Equity Share Capital has been increased due to the issue of Bonus Shares which does not involve any flow of cash. Therefore, it is not considered in the Financing Activities.

Question 38:

From the following information, calculate Net Cash Flow from Operating Activities and Financing Activities:

 Particular 31st March 2019 (â‚¹) 31st March 2018 (â‚¹) Equity Share Capital 13,75,000 11,25,000 5% Preference Share Capital 5,00,000 7,50,000 General Reserve 3,75,000 3,00,000 Surplus i.e., Balance in Statement of Profit and Loss 3,75,000 (3,50,000) Securities Premium Reserve 25,000 ... Provision for Tax 1,00,000 50,000 Non-current Liabilities (8% Debentures) 6,50,000 3,75,000 Short-term Borrowings (8% Bank Loan) 1,00,000 1,25,000 Trade Payables 5,00,000 2,50,000 Trade Receivables and Inventories 13,00,000 11,50,000

(i) During the year additional debentures were issued at par on 1st October and Bank Loan was repaid on the same date.
(ii) Dividend on Equity Shares @ 8% was paid on Opening Balance.
(iii) Income tax â‚¹ 1,12,500 has been provided during the year.
(iv) Preference shares were redeemed at par at the end of the year.

 Cash Flow Statement Particulars Amount (â‚¹) Amount (â‚¹) Cash Flow from Operating Activities Profit as per Statement of Profit and Loss 7,25,000 Items to be Added: Dividend on Equity Shares 90,000 Dividend on Preference Shares 37,500 Interest on Debentures 41,000 Interest on Bank Loan 9,000 Provision for Tax 1,12,500 Transfer to General Reserve 75,000 3,65,000 Operating Profit before Working Capital Adjustments 10,90,000 Less: Increase in Current Assets Trade Receivables& Inventories (1,50,000) Add:Increase in Current Liabilities Trade Payables 2,50,000 1,00,000 Cash Generated from Operations 11,90,000 Less: Taxes Paid 62,500 Cash Flow from Operating Activities 11,27,500

 Cash Flow Statement Particulars Amount (â‚¹) Amount (â‚¹) Cash Flow from Financing Activities Dividend on Equity Shares (90,000) Dividend on Preference Shares (37,500) Interest on Debentures (41,000) Interest on Bank Loan (9,000) Increase in Securities Premium Reserve 25,000 Proceeds from Issue of Equity Shares 2,50,000 Proceeds from Issue of Debentures 2,75,000 Redemption of Preference Shares (2,50,000) Repayment of Bank Loan (25,000) Cash Flows from Financing Activity 97,500

Working Notes:

 Provision for Tax Account Dr. Cr. Particulars Amount (â‚¹) Particulars Amount (â‚¹) Bank A/c (Bal. fig.) 62,500 Balance b/d 50,000 Balance c/d 1,00,000 Profit & Loss A/c 1,12,500 1,62,500 1,62,500

Calculation of Interest on Debentures

Calculation of Interest on Bank Loan

Question 39:

From the following information, prepare Cash Flow Statement:

 Particulars (â‚¹) Opening Cash and Bank Balances 1,50,000 Closing Cash and Bank Balances 1,70,000 Decrease in Stock 80,000 Increase in Bills Payable 1,20,000 Sale of Fixed Assets 3,00,000 Repayment of Long-term Loan 5,00,000 Net Profit for the Year 20,000

 Cash Flow Statement Particulars Amount (â‚¹) Amount (â‚¹) A Cash Flow from Operating Activities Profit as per Statement of Profit and Loss (Net Profit) 20,000 Profit Before Taxation 20,000 Items to be Added: – Operating Profit before Working Capital Adjustments 20,000 Add: Decrease in Current Assets Stock 80,000 Add: Increase in Current Liabilities Bills Payable 1,20,000 Cash Generated from Operations 2,20,000 Less: Tax Paid – Net Cash Flow from Operating Activities 2,20,000 B Cash Flow from Investing Activities Sale of Fixed Assets 3,00,000 Net Cash Flows from Investing Activities 3,00,000 C Cash Flow from Financing Activities Repayment of Long-Term Loan (5,00,000) Net Cash Used in Financing Activities (5,00,000) D Net Increase or Decrease in Cash and Cash Equivalents 20,000 Add: Cash and Cash Equivalent in the beginning of the period 1,50,000 Cash and Cash Equivalents at the end of the period 1,70,000

Question 40:

From the following Balance Sheet of Young India Ltd., prepare Cash Flow Statement:

 Particular Note No. 31st March, 2019 (â‚¹) 31st March, 2018 (â‚¹) I. EQUITY AND LIABILITIES 1. Shareholders' Funds (a) Share Capital 2,50,000 2,00,000 (b) Reserves and Surplus: Surplus, i.e., Balance in Statement of Profit and Loss 1,83,000 82,000 2. Non-Current Liabilities Long-term Borrowings: 15% Debentures 80,000 50,000 3. Current Liabilities (a) Trade Payables 1,50,000 1,10,000 (b) Other Current Liabilities 12,000 20,000 Total 6,75,000 4,62,000 II. ASSETS 1. Non-Current Assets (a) Fixed Assets (Tangible) 2,74,000 1,17,000 (b) Non-Current Investments 68,000 55,000 2. Current Assets (a) Inventories 2,06,000 1,50,000 (b) Trade Receivables 32,000 70,000 (c) Cash and Cash Equivalents 95,000 70,000 Total 6,75,000 4,62,000

 Cash Flow Statement for the year ended March 31, 2019 Particulars Amount (â‚¹) Amount (â‚¹) A Cash Flow from Operating Activities Profit as per Statement of Profit and Loss (1,83,000 – 82,000) 1,01,000 Profit Before Taxation 1,01,000 Items to be Added: Interest on Debentures 7,500 Operating Profit before Working Capital Adjustments 1,08,500 Less: Increase in Current Assets Inventories (56,000) Add: Increase in Current Liabilities Trade Payables 40,000 Less: Decrease in Current Liabilities Other Current Liabilities (8,000) Add: Decrease in Current Assets Trade Receivables 38,000 Cash Generated from Operations 1,22,500 Less: Tax Paid – Net Cash Flows from Operating Activities 1,22,500 B Cash Flow from Investing Activities Purchase of Fixed Assets (1,57,000) Purchase of Investments (13,000) Net Cash Used in Investing Activities (1,70,000) C Cash Flow from Financing Activities Proceeds from Issue of Equity Share Capital 50,000 Proceeds from Issue of 15% Debentures 30,000 Interest on Debentures (50,000 × 15%) (7,500) Net Cash Flow from Financing Activities 72,500 D Net Increase or Decrease in Cash and Cash Equivalents 25,000 Add: Cash and Cash Equivalent in the beginning of the period 70,000 Cash and Cash Equivalents at the end of the period 95,000

Note: It has been assumed that Debentures were issued at the end of the accounting period. Therefore, interest on Debentures is computed on the opening balance of the Debenture.

Question 41:

Following is the Balance Sheet of Fine Products Ltd. as at 31st March, 2019:

 Particulars Note No. 31st March, 2019 (â‚¹) 31st March, 2018 (â‚¹) I. EQUITY AND LIABILITIES 1. Shareholders' Funds (a) Share Capital: Equity Share Capital 3,50,000 3,00,000 (b) Reserves and Surplus 1 57,000 38,000 2. Current Liabilities (a) Trade Payables 53,000 35,000 (b) Other Current Liabilities 6,000 8,000 (c) Short-term Provisions 2 32,000 28,000 Total 4,98,000 4,09,000 II. ASSETS 1. Non-Current Assets (a) Fixed Assets: (i) Tangible Assets 3 2,48,000 2,00,000 (ii) Intangible Assets (Goodwill) 40,000 50,000 (b) Non-Current Investments 35,000 10,000 2. Current Assets (a) Inventories 39,000 57,000 (b) Trade Receivables 1,08,000 75,000 (c) Cash and Bank Balance 28,000 17,000 Total 4,98,000 4,09,000

Notes to Accounts

 Particulars 31st March, 2019 (â‚¹) 31st March, 2018 (â‚¹) 1. Reserves and Surplus General Reserve 30,000 20,000 Surplus, i.e., Balance in Statement of Profit and Loss 27,000 18,000 57,000 38,000 2. Short-term Provisions Provision for Tax 32,000 28,000 3. Tangible Fixed Assets Land and Building 57,000 1,10,000 Plant and Machinery 1,91,000 90,000 2,48,000 2,00,000

Note: Proposed dividends on equity for the years ended 31st March, 2018 and 2019 are â‚¹ 39,000 and â‚¹ 45,000 respectively.

You are required to prepare Cash Flow Statement for the year ended 31st March, 2019.

 Cash Flow Statement for the year ended March 31, 2019 Particulars Amount (â‚¹) Amount (â‚¹) A Cash Flow from Operating Activities Profit as per Statement of Profit and Loss 9,000 Items to be Added: General Reserve 10,000 Goodwill 10,000 Provision for Taxation 32,000 Proposed Dividend 39,000 1,00,000 Operating Profit before Working Capital Adjustments 1,00,000 Less: Increase in Current Assets Trade Receivables (33,000) Less: Decrease in Current Liabilities Other Current Liabilities (2,000) Add:Decrease in Current Assets Inventories 18,000 Add:Increase in CurrentLiabilities Trade Payables 18,000 1,000 Cash Generated from Operations 1,01,000 Less: Tax Paid (28,000) Net Cash Flows from Operating Activities 73,000 B Cash Flow from Investing Activities Purchase of Non-Current Investments (25,000) Purchase of Plant & Machinery (1,01,000) Sale of Land & Building 53,000 Net Cash Used in Investing Activities (73,000) C Cash Flow from Financing Activities Dividend Paid (39,000) Proceeds from Issue of Share Capital 50,000 Net Cash Flow from Financing Activities 11,000 D Net Increase or Decrease in Cash and Cash Equivalents 11,000 Add: Cash and Cash Equivalent in the beginning of the period 17,000 Cash and Cash Equivalents at the end of the period 28,000

Note: Proposed Dividend treatment is as per AS-4 (Revised).

Question 42:

Prepare a Cash Flow Statement on the basis of the information given in the Balance Sheet of Libra Ltd. as at 31st March, 2013 and 31st March 2012:

 Particulars ulars Note No. 31st March, 2013 (â‚¹) 31st March, 2012 (â‚¹) I. EQUITY AND LIABILITIES 1. Shareholders' Funds (a) Share Capital 8,00,000 6,00,000 (b) Reserves and Surplus 1 4,00,000 3,00,000 2. Non-Current Liabilities Long-term Borrowings 1,00,000 1,50,000 3. Current Liabilities (a) Trade Payables 40,000 48,000 Total      Total Expenses 13,40,000 10,98,000 II. ASSETS 1, Non-Current Assets (a) Fixed Assets: Tangible Assets 8,50,000 5,60,000 (b) Non-Current Investments 2,32,000 1,60,000 2. Current Assets (a) Current Investments 50,000 1,34,000 (b) Inventories 76,000 82,000 (c) Trade Receivables 38,000 92,000 (d) Cash and Cash Equivalents 94,000 70,000 Total 13,40,000 10,98,000
Notes to Accounts
 Particulars 31st March, 2013 (â‚¹) 31st March, 2012 (â‚¹) I. Reserves and Surplus Surplus, i.e., Balance in Statement of Profit and Loss 4,00,000 3,00,000

 Cash Flow Statement for the year ended March 31, 2013 Particulars Details (Rs) Amount (Rs) A Cash from Operating Activities Net Profit 1,00,000 Operating Profit Before Working Capital Changes 1,00,000 Add: Decrease in Current Assets Inventories 6,000 Trade Receivables 54,000 Less: Decrease in Current Liabilities Trade Payables (8,000) 52,000 Cash Generated from Operations 1,52,000 Less: Tax Paid - Net Cash Flow from Operating Activities 1,52,000 B Cash From Investing  Activities Purchase of Tangible Assets (2,90,000) Purchase on Non Current Investment (72,000) Net Cash Used in Investing Activities (3,62,000) C Cash From Financing Activities Issue of Share Capital 2,00,000 Long Term Borrowings (50,000) Net Cash Flow from Financing Activities 1,50,000 D Net Decrease in Cash and Cash Equivalents (60,000) Add: Cash and Cash Equivalents in the beginning of the period (70,000 + 1,34,000) 2,04,000 Cash and Cash Equivalents at the end of the period (94,000 + 50,000) 1,44,000

Question 43:

Following are the Balance Sheets of Solar Power Ltd. as at 31st March, 2014 and 2013:

 Solar Power Ltd. BALANCE SHEET
 Particulars ulars Note No. 31st March, 2014 (â‚¹) 31st March, 2013 (â‚¹) I. EQUITY AND LIABILITIES 1. Shareholders' Funds (a) Share Capital 24,00,000 22,00,000 (b) Reserves and Surplus 1 6,00,000 4,00,000 2. Non-Current Liabilities Long-term Borrowings 4,80,000 3,40,000 3. Current Liabilities (a) Trade Payables 3,58,000 4,08,000 (b) Short-term Provisions 1,00,000 1,54,000 Total      Total Expenses 39,38,000 35,02,000 II. ASSETS 1. Non-Current Assets Fixed Assets: (i) Tangible Assets 2 21,40,000 17,00,000 (ii) Intangible Assets 3 80,000 2,24,000 2. Current Assets (a) Current Investments 4,80,000 3,00,000 (b) Inventories 2,58,000 2,42,000 (c) Trade Receivables 3,40,000 2,86,000 (d) Cash and Cash Equivalents 6,40,000 7,50,000 Total 39,38,000 35,02,000
Notes to Accounts
 Particulars ulars 31st March, 2014 (â‚¹) 31st March, 2013 (â‚¹) 1. Revenue and Surplus Surplus, i.e., Balance in Statement of Profit and Loss 6,00,000 4,00,000 2. Tangible Assets Machinery 25,40,000 20,00,000 Less: Accumulated Deprciation (4,00,000) (3,00,000) Total Expenses 21,40,000 17,00,000 3. Intangible Assets Goodwill 80,000 2,24,000

Druing the year, a piece of machinery costing â‚¹48,000 on which accumulated deprciation was â‚¹ 32,000. was sold for â‚¹ 12,000.
Prepare Cash Flow Statement.

 Cash Flow Statement  for the year ended March 31, 2014 Particulars Amount (Rs) Amount (Rs) A Cash Flow from Operating Activities Profit as per Statement of Profit and Loss 2,00,000 Profit Before Taxation 2,00,000 Items to be Added: Amortisation of Goodwill 1,44,000 Depreciation 1,32,000 Loss on Sale of Fixed Assets 4,000 2,80,000 Operating Profit before Working Capital Adjustments 4,80,000 Less: Increase in Current Assets Inventories 16,000 Trade Receivables 54,000 Less: Decrease in Current Liabilities Trade Payables 50,000 Short-Term Provisions 54,000 1,74,000 Net Cash Generated from Operating Activities 3,06,000 B Cash Flow from Investing Activities Sale of Machinery 12,000 Purchase of Machinery (5,88,000) Net Cash Used in Investing Activities (5,76,000) C Cash Flow from Financing Activities Proceeds from Issue of Share Capital 2,00,000 Proceeds from Long Term Borrowings 1,40,000 Net Cash Flow from Financing Activities 3,40,000 D Net Increase or Decrease in Cash and Cash Equivalents 70,000 Add: Cash and Cash Equivalent in the beginning of the  period 10,50,000 Cash and Cash Equivalents at the end of the period 11,20,000

Working Notes:

 Machinery Account Dr. Cr. Particulars Amount (Rs) Particulars Amount (Rs) Balance b/d 20,00,000 Bank A/c (Sale) 12,000 Bank A/c (Purchase- Bal. Fig.) 5,88,000 Depreciation on Part of Machinery 32,000 Profit and Loss A/c (Loss on Sale) 4,000 Balance c/d 25,40,000 25,88,000 25,88,000

 Accumulated Depreciation Account Dr. Cr. Particulars Amount (Rs) Particulars Amount (Rs) Machinery A/c 32,000 Balance b/d 3,00,000 Balance c/d 4,00,000 Profit and Loss A/c (Dep. charged during the year- Bal. Fig.) 1,32,000 4,32,000 4,32,000

Question 44:

Following is the Balance Sheet of Mevanca Limited as at 31st March, 2017:

 Particulars Note No. 31st March, 2017 (â‚ą) 31st March, 2016 (â‚ą) I. EQUITY AND LIABILITIES 1. Shareholders' Funds (a) Share Capital 3,00,000 1,00,000 (b) Reserves and Surplus 1 25,000 1,20,000 2. Non-Current Liabilities Long-term Borrowings 2 80,000 60,000 3. Current Liabilities (a) Trade Payables 6,000 20,000 (b) Short-term Provisions 3 68,000 70,000 Total 4,79,000 3,70,000 II. ASSETS 1. Non-Current Assets Fixed Assets 4 3,36,000 1,92,000 2. Current Assets (a) Inventories 67,000 60,000 (b) Trade Receivables 51,000 65,000 (c) Cash and Cash Equivalents 25,000 49,000 (d) Other Current Assets … 4,000 Total 4,79,000 3,70,000

Notes to Accounts

 Particulars 31st March, 2017 (â‚ą) 31st March, 2016 (â‚ą) 1. Reserves and Surplus Surplus, i.e., Balance in Statement of Profit and Loss 25,000 1,20,000 25,000 1,20,000 2. Long-term Borrowings 10% Long-term Loan 80,000 60,000 80,000 60,000 3. Short-term Provisions Provision for Tax 68,000 70,000 68,000 70,000 4. Fixed Assets Machinery 3,84,000 2,15,000 Accumulated Depreciation (48,000) (23,000) 3,36,000 1,92,000

(i) Additional loan was taken on 1st July, 2016.
(ii) Tax of â‚ą 53,000 was paid during the year.
Prepare Cash Flow Statement.

 Cash flow Statement for the year ended 31st March, 2017 Particulars Amount (â‚¹) Amount (â‚¹) A. Cash Flow from Operating Activities Net Loss as per Statement of Profit and Loss (95,000) Add: Provision for Tax made (WN1) 51,000 Net loss before Tax and Extraordinary Items (44,000) Add: Depreciation charged during the year 25,000 Interest paid on loan (WN2) 7,500 Net Loss before Working Capital Changes (11,500) Add: Decrease in Trade Receivables 14,000 Decrease in other Current Assets 4,000 Less: Decrease in Trade Payables (14,000) Increase In Inventories (7,000) Net Loss before Tax (14,500) Add: Tax to be paid during the year (53,000) Cash used in Operating Activities (67,500) B. Cash Flow from Investing Activities Purchase of Machinery (1,69,000) Cash used in Investing Activities (1,69,000) C. Cash Flow from Financing Activities Proceeds from Issue of Shares 2,00,000 Proceeds from additional loan taken 20,000 Interest paid on long-term loan (7,500) Cash flow from Financing Activities 2,12,500 Net decrease in Cash and Cash Equivalents (24,000) Add: Opening Balance of Cash and Cash Equivalent 49,000 Cash and Cash Equivalents at the end of the year 25,000

Working Notes:

1.
 Dr. Provision for Tax A/c Cr. Date Particulars Amount (â‚¹) Date Particulars Amount (â‚¹) 2017 2016 March 31 To Cash A/c- Tax Paid 53,000 April 01 By balance b/d 70,000 March 31 To balance c/d 68,000 2017 March 31 By Statement of Profit & Loss A/c 51,000 1,21,000 1,21,000

2. Interest on Loan

Question 45:

From the following Balance Sheet of Kumar Ltd. as at 31st March, 2019, prepare Cash Flow Statement:

 Particulars ulars Note No. 31st March, 2019 (â‚¹) 31st March, 2018 (â‚¹) I. EQUITY AND LIABILITIES 1. Shareholders' Funds (a) Share Capital 1 16,00,000 10,40,000 (b) Reserves and Surplus, 2 5,50,000 2,60,000 2. Non-Current Liabilities Long-term Borrowings: 9% Debentures 4,00,000 6,00,000 3. Current Liabilities Trade Payables 4,50,000 1,00,000 Total      Total Expenses 30,00,000 20,00,000 II. ASSETS 1. Non-Current Assets Fixed Assets 20,00,000 15,00,000 2. Current Assets (a) Inventories 3,00,000 2,00,000 (b) Trade Receivables 2,00,000 1,00,000 (c) Cash and Cash Equivalents 5,00,000 2,00,000 Total 30,00,000 20,00,000

Notes to Accounts

 Particulars 31st March, 2019 (â‚¹) 31st March, 2018 (â‚¹) 1. Share Capital Equity Share Capital 15,00,000 10,00,000 7% Preference Share Capital 1,00,000 40,000 16,00,000 10,40,000 2. Reserves and Surplus General Reserve 4,00,000 60,000 Surplus, i.e., Balance in Statement of Profit and Loss 1,50,000 2,00,000 5,50,000 2,60,000

1. During a year, a machinery costing â‚¹ 20,000 was sold for â‚¹ 6,000.
2. Dividend paid during the year â‚¹ 50,000.

 Cash Flow Statement for the year ended March 31, 2019 Particulars Amount (â‚¹) Amount (â‚¹) A Cash Flow from Operating Activities Profit as per Statement of Profit and Loss (1,50,000 – 2,00,000) (50,000) Transfer to General Reserve 3,40,000 Dividend Paid 50,000 Profit Before Taxation 3,40,000 Items to be Added: Interest Paid 54,000 Loss on Sale of Machinery 14,000 Operating Profit before Working Capital Adjustments 4,08,000 Less: Increase in Current Assets Inventories (1,00,000) Trade Receivables (1,00,000) Add: Increase in Current Liabilities Trade Payables 3,50,000 Cash Generated from Operations 5,58,000 Less: Tax Paid – Net Cash Flow from Operating Activities 5,58,000 B Cash Flow from Investing Activities Sale of Machinery 6,000 Purchase of Fixed Assets (5,20,000) Net Cash Used in Investing Activities (5,14,000) C Cash Flow from Financing Activities Proceeds from Issue of Equity Share Capital 5,00,000 Proceeds from 7% Preference Share Capital 60,000 Dividend Paid (50,000) Redemption of 9% Debentures (2,00,000) Interest Paid (6,00,000 × 9%) (54,000) Net Cash Flow from Financing Activities 2,56,000 D Net Increase in Cash and Cash Equivalents 3,00,000 Add: Cash and Cash Equivalent in the beginning of the period 2,00,000 Cash and Cash Equivalents at the end of the period 5,00,000

Working Notes:

 Fixed Assets Account Dr. Cr. Particulars Amount (â‚¹) Particulars Amount (â‚¹) Balance b/d 15,00,000 Bank A/c (Sale) 6,000 Bank A/c (Purchase- Bal. Fig.) 5,20,000 Profit and Loss A/c (Loss on Sale) 14,000 Balance c/d 20,00,000 20,20,000 20,20,000

Question 46:

Following was the Balance Sheet of M.M. Ltd. as at 31st March, 2015:

 Particulars Note No. (â‚¹) (â‚¹) I. EQUITY AND LIABILITIES 1. Shareholders' Funds (a) Share Capital 5,00,000 4,00,000 (b) Reserves and Surplus 1 2,00,000 (50,000) 2. Non-Current Liabilities Long-term Borrowings 2 4,50,000 5,00,000 3. Current Liabilities (a) Short-term Borrowings 3 1,50,000 50,000 (b) Short-term Provisions 4 70,000 90,000 Total      Total Expenses 13,70,000 9,90,000 II. ASSETS 1. Non-Current Assets (a) Fixed Assets: (i) Tangible Assets 5 10,03,000 7,20,000 (ii) Intangible Assets 6 20,000 30,000 (b) Non-Current Investments 1,00,000 75,000 2. Current Assets (a) Current Investments 50,000 60,000 (b) Inventories 7 1,07,000 45,000 (c) Cash and Cash Equivalents 90,000 60,000 Total 13,70,000 9,90,000

Notes to Accounts

 Particular 31st March 2015 (â‚¹) 31st March 2014 (â‚¹) 1. Reserves and Surplus Surplus, i.e., Balance in Statement of Profit and Loss 2,00,000 (50,000) 2,00,000 (50,000) 2. Long-term Borrowings 12% Debentures 4,50,000 5,00,000 4,50,000 5,00,000 3. Short-term Borrowings Bank Overdraft 1,50,000 50,000 1,50,000 50,000 4. Short-term Provisions Provision for Tax 70,000 90,000 70,000 90,000 5. Tangible Assets Machinery 12,03,000 8,21,000 Less: Accumulated Depreciation (2,00,000) (1,01,000) 10,03,000 7,20,000 6. Intangible Assets Goodwill 20,000 30,000 20,000 30,000 7. Inventories Stock-in-Trade 1,07,000 45,000