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Page No 5.100:

Question 30:

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

 

 

 

Particulars

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

 

 

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

Answer:

Cash Flow from Investing Activities

 

Particulars

Amount

(₹)

Amount

(₹)

 

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

(₹)

Particulars

Amount

(₹)

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

(₹)

Particulars

Amount

(₹)

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

 

 

 

 

Page No 5.100:

Question 31:

From the following particulars, calculate Cash Flow from Investing Activities

 

 

 

Particulars

Purchased (₹) Sold (₹)
Machinery 6,20,000 2,00,000
Investments 2,40,000 80,000
Goodwill 1,00,000 ...
Patents ... 1,50,000

 

 

 
     
Additional Information:
1. Interest received on debentures held as investment ₹ 8,000.
2. Interest paid on debentures issued ₹ 20,000.
3. Dividend received on shares held as investment ₹ 20,000.
4. Dividend paid on Equity Share Capital ₹ 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 ₹ 50,000 during the year.

Answer:

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.

Page No 5.100:

Question 32:

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

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

During the year, the company repaid a loan of ₹1,00,000.

Answer:

 

Cash Flow Statement

 

Particulars

Amount

(₹)

Amount

(₹)

 

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

(₹)

Particulars

Amount

(₹)

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

       

Page No 5.100:

Question 33:

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

Particulars

31st March,
2019

(₹)

31st March,
2018

(₹)
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 ₹ 18,000.

Answer:

Cash Flow from Financing Activities

 

Particulars

Amount

(₹)

Amount

(₹)

 

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



Page No 5.101:

Question 34:

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

Particulars

31st March,

2019

(₹)

31st March,

2018

(₹)
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

Additional Information:
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 ₹ 1,00,000 were issued on 31st March, 2019.

Answer:

Cash Flow from Financing Activities

for the year ended March 31, 2019
 

 

Particulars

Amount

(₹)

Amount

(₹)

 

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

 

 

 

 

Page No 5.101:

Question 35:

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

Particulars

31st March

2019

(₹)

31st March

2018

(₹)
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 ₹ 10,000 was sold at a loss of ₹ 2,000. Depreciation on machinery charged during the year amounted to ₹ 6,000.

Answer:

Cash Flow Statement

for the year ended March 31, 2019

 

Particulars

Amount

(₹)

Amount

(₹)

 

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

(₹)

Particulars

Amount

(₹)

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

(₹)

Particulars

Amount

(₹)

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

 

 

 

 

Page No 5.101:

Question 36:

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

Particular

31st, March,

2018, (₹)

31st, March,

2019, (₹)

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

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

Answer:

Cash flow Statement 

for the year ended 31st March, 2019

Particulars

Amount
(₹)

Amount
(₹)

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

(₹)

Date

Particulars

Amount

(₹)

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

(₹)

Date

Particulars

Amount

(₹)

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

   

 

 

 

 



Page No 5.102:

Question 37:

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

Particular

31st March,

2019 (₹)

31st March,

2018  (₹)

Equity Share Capital 12,00,000 10,00,000
12% Debentures

2,00,000

1,00,000

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

Answer:

Cash Flow from Financing Activities

 

Particulars

Amount

(₹)

Amount

(₹)

 

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.

Page No 5.102:

Question 38:

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

Particular

31st March

2019

(₹)

31st March

2018

(₹)
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

Additional Information:
(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 ₹ 1,12,500 has been provided during the year.
(iv) Preference shares were redeemed at par at the end of the year.
 

Answer:

Cash Flow Statement

 

Particulars

Amount

(₹)

Amount

(₹)

 

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

(₹)

Amount

(₹)

 

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

(₹)

Particulars

Amount

(₹)

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

3,75,000×8100=30,0002,75,000×8100×612=11,000Total Interest=41,000 30,000+11,000

Calculation of Interest on Bank Loan

1,25,000×8100×612=5,0001,00,000×8100×612=4,000Total Interest=9,000 5,000+4,000



Page No 5.103:

Question 39:

From the following information, prepare Cash Flow Statement:

Particulars

(₹)

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

Answer:

Cash Flow Statement

 

Particulars

Amount

(₹)

Amount

(₹)

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

 

 

 

 

Page No 5.103:

Question 40:

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

BALANCE SHEET OF YOUNG INDIA LTD.
as at 31st March, 2019

Particular

Note No.

31st March, 2019 (₹)

31st March, 2018 (₹)

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

       

Answer:

Cash Flow Statement

for the year ended March 31, 2019

 

Particulars

Amount

(₹)

Amount

(₹)

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.



Page No 5.104:

Question 41:

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

Particulars

Note No.

31st March, 2019

(₹)

31st March, 2018

(₹)

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

(₹)

31st March, 2018

(₹)

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 ₹ 39,000 and ₹ 45,000 respectively.

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

Answer:

Cash Flow Statement

for the year ended March 31, 2019

 

Particulars

Amount

(₹)

Amount

(₹)

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).



Page No 5.105:

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
(₹)
31st March, 2012
(₹)
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
(₹)
31st March, 2012
(₹)
I. Reserves and Surplus    
Surplus, i.e., Balance in Statement of Profit and Loss
4,00,000 3,00,000
     

Answer:

 

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

 

 

 

 

 

 

 

 

 



Page No 5.106:

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
(₹)
31st March, 2013
(₹)
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
(₹)
31st March, 2013
(₹)
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
     

Additional Iformation:
Druing the year, a piece of machinery costing ₹48,000 on which accumulated deprciation was ₹ 32,000. was sold for ₹ 12,000.
Prepare Cash Flow Statement.

Answer:

 

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

 

 

 

 

 



Page No 5.107:

Question 44:

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

Mevanca Limited BALANCE SHEET
as at 31st March, 2017:
Particulars
Note No.
31st March, 2017
(₹)
31st March, 2016
(₹)
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
(₹)
31st March, 2016
(₹)
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

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

Answer:

Cash flow Statement 

for the year ended 31st March, 2017

Particulars

Amount
(₹)

Amount
(₹)

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

(₹)

Date

Particulars

Amount

(₹)

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
Interest on Loan taken on 1st July, 2016=20,000×10100×912=1,500Interest on Loan as on 31st March, 2016=60,000×10100=6,000Total Interest Paid on Loan=(6,000+1,500)=7,500



Page No 5.108:

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
(₹)
31st March, 2018
(₹)
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

(₹)

31st March, 2018
(₹)
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
     

Additional Information:
1. During a year, a machinery costing ₹ 20,000 was sold for ₹ 6,000.
2. Dividend paid during the year ₹ 50,000.

Answer:

Cash Flow Statement

for the year ended March 31, 2019

 

Particulars

Amount

(₹)

Amount

(₹)

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

(₹)

Particulars

Amount

(₹)

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

 

 

 

 



Page No 5.109:

Question 46:

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

Particulars Note No.
(₹)
(₹)
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

(₹)

31st March 2014

(₹)

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