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Page No 282:

Question 1:

What is a Cash Flow Statement?

Answer:

A Cash Flow Statement is a statement showing inflows and outflows of cash and cash equivalents from operating, investing and financing activities of a company during a particular period. It explains the reasons of receipts and payments in cash and change in cash balances during an accounting year in a company.

Page No 282:

Question 2:

How are the various activities classified (as per AS-3 revised) while preparing cash flow statement?

Answer:

As per the Revised Accounting Standard 3 (AS-3), preparation of Cash Flow Statement for each period is mandatory. AS-3 also specifies the classification of all inflows and outflows basically under the following heads:

1. Cash Flow from Operating Activities

2. Cash Flow from Investing Activities

3. Cash Flow from Financing Activities

Page No 282:

Question 3:

State the uses of cash flow statement?

Answer:

The uses of cash flow statement are as follows:

1. It is useful for short term financial planning about inflows and outflow of cash.

2. It helps in analysing the reason for the change in cash and cash equivalent balances of a company

3. It assists in determining and assessing liquidity and solvency positions of a company.

4. It enables to analyse and study the trends of receipts and payments of cash from various activities of a company and thereby helps in drafting various policy measures and short term planning.

5. It enables the segregation of cash flows from operating, investing and financing activities of the business separately.

6. It assists in making decision about distribution of profit with reference to the availability of cash.

Page No 282:

Question 4:

What are the objectives of preparing cash flow statement?

Answer:

The important objectives for preparing Cash Flow Statement are as follows:

1. The most important objective that is fulfilled by preparing Cash Flow Statement is to ascertain the gross inflows and outflows of cash and cash equivalents from various activities.

2. Secondly, Cash Flow Statement helps in analysing various reasons responsible for change in the cash balances during an accounting year.

3. This statement helps in analysing and understanding the liquidity and solvency of a company , thereby, depicting the true liquidity position to the creditors and the investors.

4. Cash Flow Statement also helps in ascertaining the requirement and availability of cash in near future.

Page No 282:

Question 5:

State the meaning of the terms: Cash Equivalents, Cash flows.

Answer:

Cash equivalents are short term, highly liquid investments that are easily convertible into cash and which are subject to an insignificant risk of change in value. In other words, cash equivalents are held for the purpose of meeting short term cash commitments rather than for investment or any other purpose. An investment held for short-term maturity, say three months can be regarded as cash equivalent. Some examples of cash equivalents are treasury bills, commercial papers, etc. On the other hand, cash flows are inflows and outflows of cash and cash equivalents. A cash inflow results in increase in the total cash balance and a cash outflow results in decrease in the total cash balance.

Page No 282:

Question 6:

Prepare a format of cash flow from operating activities under_*_ and indirect method.

* Preapre Cash Flow from Operating Activities using both the methods i.e. Direct and Indirect Method.

Answer:

The format of cash flow from operating activities is as follows:

 

Direct Method

 

Cash Flow from Operating Activities:

 

Cash receipts from customers

***

Cash paid to suppliers and employers

(***)

Cash generated from operations

***

Income tax paid

(***)

Cash flow before extraordinary items

***

+/– Extraordinary items

***

Net Cash from operating activities

***

 

Indirect Method

 

Cash Flow from Operating Activities:

 

 

Net Profit before tax and extraordinary items

 

***

 

Add:

Non-Cash Expenses and Non-Operating Expenses

 

 

 

 

Depreciation

**

 

 

 

Goodwill

**

 

 

 

Interest paid

**

 

 

 

Loss on sale of fixed assets

**

 

 

 

Foreign exchange

**

**

 

Less:

Non Operating Incomes.

 

 

 

 

Dividend received

**

 

 

 

Profit on sale of fixed assets

**

 

 

 

Interest received

**

**

Operating profit before working capital changes

 

***

 

Add: Decrease in Current Assets

***

 

 

 

Increase in Current Liabilities

***

***

 

Less: Increase in Current Assets

***

 

 

 

Decrease in Current Liabilities

***

***

Cash generated from Operating Activities

 

***

Income tax paid

 

***

Cash Flow before Extraordinary Items

 

***

 

Add/Less: Extra ordinary Items

 

***

Net Cash Flow from Operating Activities

 

***

 

 

 

Note: Preparation of Cash Flow Statement using Direct Method has been excluded from the prescribed syllabus. The format is given since the question has not specified the method explicitly. Students can refer to the direct method for the knowledge purpose.
 

Page No 282:

Question 7:

State clearly what would constitute the operating activities for each of the follow in the following of enterprises:

(i) Hotel

(ii) Film production house

(iii) Financial enterprise

(iv) Media enterprise

(v) Steel manufacturing unit

(vi) Software development business unit.

Answer:

(i) Hotels

1. Receipts from sale of goods to customer.

2. Payment of wages and salaries, electricity, food items and other items used in accommodation.

(ii) Film Production House:

1. Receipts from selling film rights of a film to the distributors.

2. Payment to the staff, actors, actresses, directors, etc.

(ii) Financial Enterprises:

1. Receipts from repayment of loans, interest incomes from investments, etc.

2. Repayment of loans, recovery expenditure for recover of loans etc, salaries of employees.

(iv) Media Enterprises:

1. Receipts from advertisements.

2. Payments to staff, reporters, photographers, etc.

(v) Steel Manufacturing Unit:

1. Receipts from sale of steel sheets, steel castings, steel rods, etc.

2. Payment for iron, coal, salaries to staff, etc.

(vi) Software Development Business Unit:

1. Receipts from sale of software and renewal of licenses.

2. Payment of salaries to their employees, etc.

Page No 282:

Question 8:

“The nature/type of enterprise can change altogether the category into which a particular activity may be classified.” Do you agree? Illustrate your answer.

Answer:

Yes, the nature or type of an enterprise can change the category into which a particular activity may be classified. This can be better understood with the help of an example of two firms. One engaged in financial services and the other engaged in manufacturing services. For the firm that is engaged in financial services, interests received or paid are classified under operating activities whereas for the firm that is engaged in manufacturing business, interests paid are classified under financing activities and interest received as investing activities. Therefore, the classification of activities depends on the nature and type of enterprise.

Page No 282:

Question 1:

Describe the procedure to prepare Cash Flow Statement.

Answer:

The procedure to prepare Cash Flow Statement is described in the following steps in their chronological order.

Step 1: Ascertain the cash flows from operating activities

Step 2: Ascertain the cash flows from investing activities

Step 3: Ascertain the cash flows from financing activities

Step 4: Ascertain net increase or decrease by summing up the amounts of Steps 1, 2, and 3.

Step 5: Write the opening balance of cash and cash equivalents and deduct it from the amount ascertained in Step 4. The resulting figure arrived is the Closing Balance of Cash and Cash Equivalents.

There are two methods viz. Direct Method and Indirect Method for the preparation of Cash Flow Statement.

 

Direct Method

 

Cash Flow Statement

 

 

Particulars

Amount

Rs

Amount

Rs

A.

Cash Flow from Operating Activities

 

 

 

Cash Sales

**

 

 

Cash receipt from Debtors

**

 

 

 

Less: Cash Purchases

**

 

 

 

Cash paid to creditors and other expenses

**

 

 

 

Cash Generated from Operating Activities

**

 

 

 

Less: Income Tax Paid

**

 

 

 

Cash flow before Extraordinary Items

**

 

 

 

Add/Less: Extraordinary Items

**

 

 

 

Net Cash Flow from (used in) Operating Activities

**

**

 

 

 

 

 

B.

Cash Flow from Investing Activities

**

 

 

Sale of Fixed Assets

**

 

 

Sale of long-term Investments

**

 

 

Interest Received

**

 

 

Dividend Received

**

 

 

Rent Received

**

 

 

 

Less: Purchase of Fixed Assets

**

 

 

 

Less: Purchase of long-term Investment

**

 

 

Net Cash Flow from Investing Activities

**

**

 

 

 

 

 

C.

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Shares

**

 

 

Proceeds from Issue of Debentures and Other Long-term Borrowings

**

 

 

 

Less: Repayment of Debentures and Other Long-term Borrowings

**

 

 

 

Less: Redemption of Preference Shares

**

 

 

 

Less: Interest Paid

**

 

 

 

Less: Dividend Paid

**

 

 

Net Cash flow from Financing Activities

**

**

 

Net Increase (or Decrease in Cash and Cash Equivalents (A+B+C)

 

**

 

Cash and Cash Equivalents at the beginning (Cash in Hand,

Cash at Bank, Marketable Securities, Short-term Deposits)

 

**

 

Cash and Cash Equivalent at the end

 

**

 

 

 

 

           

Indirect Method

 

 

Cash Flow Statement

 

 

 

Particulars

Amount

Rs

Amount

Rs

A.

Cash Flow from Operating Activities:

 

 

 

Net Profit before tax and extraordinary items

 

***

 

 

Add: Non-Cash Expenses and non operating expenses.

 

 

 

 

 

Depreciation

**

 

 

 

 

Goodwill

**

 

 

 

 

Interest paid

**

 

 

 

 

Loss on sale of fixed assets

**

**

 

 

Less:

Non-Operating Incomes.

 

 

 

 

 

Dividend received

**

 

 

 

 

Profit on sale of fixed assets

**

 

 

 

 

Interest received

**

**

 

Operating Profit before Working Capital Changes

 

***

 

 

Add: Decrease in Current Assets

***

 

 

 

 

Increase in Current Liabilities

**

***

 

 

Less: Increase in Current Assets

***

 

 

 

 

Decrease in Current Liabilities

***

***

 

Cash generated from Operating Activities

 

***

 

Less: Income tax paid

 

***

 

Cash flow before Extra ordinary items

 

***

 

 

Add/Less: Extra ordinary items

 

***

 

Net Cash Flow from Operating Activities

 

***

 

 

 

 

B.

Cash Flow from Investing Activities

**

 

 

Sale of Fixed Assets

**

 

 

Sale of Long-term Investments

**

 

 

Interest Received

**

 

 

Dividend Received

**

 

 

Rent Received

**

 

 

 

Less: Purchase of Fixed Assets

**

 

 

 

Less: Purchase of long term Investment

**

 

 

Net Cash Flow from Investing Activities

**

**

 

 

 

 

C.

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of shares

**

 

 

Proceeds from Issue of Debentures and other Long-term Borrowings

**

 

 

 

Less: Repayment of Debentures and other Long-term Borrowings

**

 

 

 

Less: Redemption of preference Share

**

 

 

 

Less: Interest paid

**

 

 

 

Less: Dividend paid

**

 

 

Net Cash Flow from Financing Activities

**

**

 

Net Increase (or Decrease in Cash and Cash Equivalents (A+B+C)

 

**

 

Cash and Cash Equivalents at the beginning (Cash in Hand, Cash at Bank, Marketable Securities, Short-term Deposits)

 

**

 

Cash and Cash Equivalents at the end

 

**

 

 

 

 

               

Note: Preparation of Cash Flow Statement using Direct Method has been excluded from the prescribed syllabus. The format is given since the question has not specified the method explicitly. Students can refer to the direct method for the knowledge purpose.

 

Page No 282:

Question 2:

Describe"Indirect" method of ascertaining Cash Flow from Operating Activities.

Answer:

Indirect Method: This method starts with the Net Profit before tax and extraordinary items. For this purpose, the Net Profit as revealed by the Profit and Loss Account cannot be taken into consideration as there exists some items which do not leads to outflow of cash. The following are those items that need to be added back to the Net Profit of the Profit and Loss Account.

 

a. Non-cash items like, depreciation goodwill written off, etc are added to the Net Profit.

b. Non-operating expenses like loss on sale of fixed assets, transfers to reserves, loss on sale of fixed assets are added back to the Net Profit.

c. Provisions like, provisions for doubtful debts and discount for debtors, proposed dividends etc. should be added back to the Net Profit.

d. Decrease in current assets and increase in current liabilities should be added to the operating profit.

 

The following are those items that need to deduct from the Net Profit of the Profit and Loss Account.

a. Non-operating incomes like profit on sale of fixed assets, etc. are deducted from the Net Profit.

b. Non-trading Incomes like dividend received, interest received, tax refund, etc. are to be deducted from the Net Profit.

c. Increase in current assets and decrease in current liabilities should be deducted from the operating profit.

 

Indirect Method

 

 

 

Cash Flow Statement

 

 

 

Particulars

Amount

Rs

Amount

Rs

Cash Flow from Operating Activities:

 

 

Net Profit before tax and extraordinary items

 

***

 

Add: Non-Cash Expenses and Non-Operating Expenses.

 

 

 

 

Depreciation

**

 

 

 

Goodwill

**

 

 

 

Interest paid

**

 

 

 

Loss on sale of fixed assets

**

**

 

Less:

Non-Operating Incomes.

 

 

 

 

Dividend received

**

 

 

 

Profit on sale of fixed assets

**

 

 

 

Interest received

**

**

Operating Profit before Working Capital Changes

 

***

 

Add: Decrease in Current Assets

***

 

 

 

Increase in Current Liabilities

**

***

 

Less: Increase in Current Assets

***

 

 

 

Decrease in Current Liabilities

***

***

Cash generated from Operating Activities

 

***

Less: Income tax paid

 

***

Cash flow before Extra ordinary items

 

***

 

Add/Less: Extra ordinary items

 

***

Net Cash Flow from Operating Activities

 

***

 

 

Page No 282:

Question 3:

Explain the major Cash Inflow and outflows from investing activities.

Answer:

Investing activities are those activities that are related to sales and purchases of long-term fixed assets like, land and building, plant and machinery, furniture, etc. These fixed assets are not held for resale. The activities like sale and purchase of investments that are not included in the cash equivalents are also included in Investing activities. Any income arising from such investments (assets) are regarded a part of investing activities.

As per the AS3, the major cash inflows and outflows from investing activities are as follows:

a. Cash payments to acquire fixed assets (including intangibles like, goodwill). These payments include capitalised cost of research and development and self constructed fixed assets.

b. Cash receipts from disposal of fixed assets (including intangible assets).

c. Cash payments to acquire shares, warrants, or debt instruments of other enterprises and interest in joint venture (other than payments of those instruments consider as cash equivalents and are held for the trading purposes).

d. Cash receipts from disposal of shares, warrants or debt instruments of other enterprises and interest from joint ventures (other than receipts from those held for trading purposes).

e. Cash advances and loans made to third parties (other than advances, and loans made by financial enterprises). These will be treated as cash flows from the operating activities.

f. Cash receipts from repayment of advances and loans made to third parties (other than advances and loans of financial enterprises). These will be treated as

cash flows from operating activities.

g. Cash receipts from insurance company for any property involved in accident.

h. Any income arising from fixed assets or investments like interest, dividend, rent etc. In case of financial enterprises interest and dividend is treated as operating activities.

 

Direct Method

 

Cash Flow Statement

 

 

Particulars

Amount

Rs

Amount

Rs

 

Net Cash Flow from (used in) Operating Activities

**

**

 

 

 

 

B.

Cash Flow from Investing Activities

**

 

 

Sale of Fixed Assets

**

 

 

Sale of long-term Investments

**

 

 

Interest Received

**

 

 

Dividend Received

**

 

 

Rent Received

**

 

 

 

Less: Purchase of Fixed Assets

**

 

 

 

Less: Purchase of long-term Investments

**

 

 

Net Cash Flow from Investing Activities

**

**

 

Indirect Method

 

Cash Flow Statement

 

 

Particulars

Amount

Rs

Amount

Rs

Net Cash Flow from Operating Activities

 

***

 

 

 

Cash Flow from Investing Activities

**

 

Sale of Fixed Assets

**

 

Sale of Long-term Investments

**

 

Interest Received

**

 

Dividend Received

**

 

Rent Received

**

 

 

Less: Purchase of Fixed Assets

**

 

 

Less: Purchase of long term Investment

**

 

Net Cash Flow from Investing Activities

**

**

         

Note: Preparation of Cash Flow Statement using Direct Method has been excluded from the prescribed syllabus. The format is given since the question has not specified the method explicitly. Students can refer to the direct method for the knowledge purpose.
 

 

Page No 282:

Question 4:

Explain the major Cash Inflows and outflows from financing activities.

Answer:

Financing activities are those activities that are related to capital or long term funds of an enterprise. These activities results in the change in the capital and borrowed funds.

 

As per the AS3, the major cash inflows from financing activities are as follows:

a. Cash proceeds from issue of shares and other similar instruments.

b. Cash proceeds from issue of debentures, loans, notes, bonds, and other short and long-term borrowings.

 

As per the AS3, the major cash outflows from financing activities are as follows:

a. Cash repayments of the amount borrowed in form of debentures, loans, notes bonds, and other short and long-term borrowings.

b. Buy-back of shares and debentures.

c. Interest paid on debentures, loans, and advances.

d. Dividend paid to the preference shareholders and equity shareholders.

An important point that must be noted is that the purchase and sale of securities, interest paid or received and dividend received is treated as cash flow from operating activities for an investment company. But dividend paid is treated as cash flow from financing activities.

 

Direct Method

 

Cash Flow Statement

 

 

 

Particulars

Amount

Rs

Amount

Rs

 

Net Cash Flow from Investing Activities

**

**

 

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Shares

**

 

 

Proceeds from Issue of Debentures and Other Long-term Borrowings

**

 

 

 

Less: Repayment of Debentures and Other Long-term Borrowings

**

 

 

 

Less: Redemption of Preference Shares

**

 

 

 

Less: Interest Paid

**

 

 

 

Less: Dividend Paid

**

 

 

Net Cash flow from Financing Activities

**

**

 

Net Increase (or Decrease in Cash and Cash Equivalents (A+B+C)

 

**

 

Cash and Cash Equivalents at the beginning (Cash in Hand,

Cash at Bank, Marketable Securities, Short-term Deposits)

 

**

 

Cash and Cash Equivalent at the end

 

**

           

 

Indirect Method

 

Cash Flow Statement

 

Particulars

Amount

Rs

Amount

Rs

Net Cash Flow from Investing Activities

**

**

Cash Flow from Financing Activities

 

 

Proceeds from Issue of shares

**

 

Proceeds from Issue of Debentures and other Long-term Borrowings

**

 

 

Less: Repayment of Debentures and other Long-term Borrowings

**

 

 

Less: Redemption of preference Share

**

 

 

Less: Interest paid

**

 

 

Less: Dividend paid

**

 

Net Cash Flow from Financing Activities

**

**

Net Increase (or Decrease in Cash and Cash Equivalents (A+B+C)

 

**

Cash and Cash Equivalents at the beginning (Cash in Hand,

Cash at Bank, Marketable Securities, Short-term Deposits)

 

**

Cash and Cash Equivalents at the end

 

**

 

Note: Preparation of Cash Flow Statement using Direct Method has been excluded from the prescribed syllabus. The format is given since the question has not specified the method explicitly. Students can refer to the direct method for the knowledge purpose.

 

Page No 282:

Question 1:

Anand Ltd. arrived at a net income of Rs 5,00,000 for the year ended March 31, 2017. Depreciation for the year was Rs 2,00,000. There was a gain of Rs 50,000 on assets sold which was credited to profit and loss account. Bills Receivables increased during the year Rs 40,000 and Bills Payables also increased by Rs 60,000. Compute the cash flow operating activities by the indirect approach.

Answer:

 

Cash Flow from Operating Activities as on March 31, 2017

Particulars

Amount

Rs

Amount

Rs

 

 

 

Net Profit during the year

 

5,00,000

Items to be adjusted:

 

 

 

Add: Depreciation

2,00,000

 

 

Less: Gain on sale of assets

(50,000)

1,50,000

Operating Profit before Working Capital changes

 

6,50,000

 

Add: Increase in Bills Payable

60,000

 

 

Less: Increase in Bills Receivable

(40,000)

20,000

Net Cash from Operations

 

6,70,000

 

 

 

 



Page No 283:

Question 2:

From the information given below you are required to prepare the cash paid for the inventory:

 

 

Rs

Inventory in the beginning

40,000

Purchases

1,60,000

Inventory in the end

38,000

Trade payables in the beginning

14,000

Trade payables in the end

14,500

 

 

Answer:

Trade Payables Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Cash (Balancing fig.)

 

1,59,500

 

Balance b/d

 

14,000

 

 Balance c/d

 

14,500

 

Purchases

 

1,60,000

 

 

 

1,74,000

 

 

 

1,74,000

 

 

 

 

 

 

 

 

 

Cash paid for Inventory amounts to Rs 1,59,500

 

 

Page No 283:

Question 3:

For each of the following transactions, calculate the resulting cash flow and state the nature of cash flow viz., operating, investing and financing.

(a) Acquired machinery for Rs 2,50,000 paying 20% drawn and executing a bond for the balance payable.

(b) Paid Rs 2,50,000 to acquire shares in Informa Tech. and received a dividend of Rs 50,000 after acquisition.

(c) Sold machinery of original cost Rs 2,00,000 with an accumulated depreciation of Rs 1,60,000 for Rs 60,000.

Answer:

(a)

Part payment Rs 50,000 for acquiring machinery Rs 2,50,000 is related with Investing Activities

(b)

 

Rs

Amount paid for acquiring shares

(2,50,000)

Dividend received

50,000

Net Cash used in Investing Activities

(2,00,000)

 

 

 

Amount paid to acquire assets and dividend received is a part of Investing Activities.

 

(c) Inflow of cash of Rs 60,000 on sale of machinery is a part Investing Activities.

Page No 283:

Question 4:

The following is the Profit and Loss Account of Yamuna Limited:

 

Statement of Profit and Loss of Yamuna Ltd.

for the Year ended March 31, 2017

Particulars

Note No.

Amount

(Rs)

i)

Revenue from Operations

 

10,00,000

ii)

Expenses

 

 

 

Cost of Material Consumed

1

50,000

 

Purchase of Stock-in-trade

 

5,00,000

 

Other Expenses

2

3,00,000

 

Total Expenses

 

8,50,000

iii)

Profit before Tax (I – ii)

 

1,50,000

 

Additional information:

(i) Trade receivables decrease by Rs 30,000 during the year.

(ii) Prepaid expenses increase by Rs 5,000 during the year.

(iii) Trade creditors decrease by Rs 15,000 during the year.

(iv) Outstanding expenses payable increased by Rs 3,000 during the year.

(v) Operating expenses included depreciation of Rs 25,000. 

Compute net cash provided by operations for the year ended March 31, 2017 by the indirect method.

 

Answer:

Cash Flow from Operating Activities of Yamuna Limited as on March 31, 2017

Particulars

Amount

Rs

Amount

Rs

 

 

 

Net Profit earned during the year

 

1,50,000

Items to be added:

 

 

 

 

Depreciation

 

25,000

Operating Profit before Working Capital changes

 

1,75,000

 

Add:

Increase in Current Liabilities

 

 

 

 

Outstanding Expenses

3,000

 

 

Add:

Decrease in Current Assets

 

 

 

 

Trade Receivables

30,000

 

 

 

Stock

50,000

83,000

 

Less:

Decrease in Current Liabilities

 

 

 

 

Trade Creditors

(15,000)

 

 

Less:

Increase in Current Assets

 

 

 

 

Prepaid Expenses

(5,000)

(20,000)

Net Cash from Operations

 

2,38,000

 

 

 

 

Note: As per the solution, the Net Cash from Operating Activities is Rs 2,38,000, however, as per the answer given in the book is Rs 2,18,000.

 



Page No 284:

Question 5:

Compute cash from operations from the following figures:

(i) Profit for the year 2016-17 is a sum of Rs. 10,000 after providing for depreciation of Rs. 2,000.

(ii) The current assets of the business for the year ended March 31, 2016 and 2017 are as follows:

 

March
31, 2016
(Rs.)
March
31, 2017
(Rs.)
Trade Receivables 14,000 15,000
Provision for Doubtful Debts 1,000 1,200
Trade Payables 13,000 15,000
Inventories 5,000 8,000
Short-term Investments 10,000 12,000
Expenses payable 1,000 1,500
Prepaid Expenses 2,000 1,000
Accrued Income 3,000 4,000
Income received in advance 2,000 1,000

Answer:

Cash Flow Statement

for the Year Ending March 31, 2017

Particulars

Details

(Rs)

Amount

(Rs)

Cash from Operating Activities

 

 

 Net Profit

 

10,000

Items to be added:

 

 

Depreciation

2,000

2,000

Operating Profit before Working Capital Adjustments

 

12,000

Less: Increase in Current Assets

 

 

Trade Receivables

(1,000)

 

Accrued Income

(1,000)

 

Short-term Investments

(2,000)

 

Inventories

(3,000)

 

Add: Increase in Current Liabilities

 

 

Provision for Doubtful Debts

200

 

Trade Payables

2,000

 

Expense Payable

500

 

Add: Decrease in Current Assets

 

 

Prepaid Expenses

(1,000)

 

Less: Decrease in Current Liabilities

 

 

Income received in advance

1,000

 

 

 

 

Net Cash From Operating Activities

 

7,700

 

 

 

 

Page No 284:

Question 6:

From the following particulars of Bharat Gas Limited, calculate Cash Flows from Investing Activities. Also, show the workings clearly preparing the ledger accounts:

Balance Sheet of Bharat Gas Ltd. as on 31 Mar. 2016 and 31 Mar. 2017  
Particulars Note No. Figures as the end of 2017
(Rs)
Figures as at the
end of reporting 2016
(Rs)
II) Assets      
1. Non-current Assets
     
a) Fixed assets
     
i) Tangible assets
1 12,40,000 10,20,000
ii) Intangible assets
2 4,60,000 3,80,000
b) Non-current investments
3 3,60,000 2,60,000

 

Notes 1 Tangible assets = Machinery
  2 Intangible assets = Patents

Notes

  Figures of current year Figures of previous year
     
1. Tangible Assets    
Machinery
12,40,000 10,20,000
2. Intangible Assets          
Goodwill
3,00,000 1,00,000
Patents
1,60,000 2,80,000
    4,60,000 3,80,000
3. Non-current Investments          
10% long term investments  
1,60,000 60,000
Investment in land  
1,00,000 1,00,000
Shares of Amartex Ltd.  
1,00,000 1,00,000
    3,60,000 2,60,000
           


Additional Information:

(a) Patents were written-off to the extent of Rs. 40,000 and some Patents were sold at a profit of Rs. 20,000.

(b) A Machine costing Rs. 1,40,000 (Depreciation provided thereon Rs. 60,000) was sold for Rs. 50,000. Depreciation charged during the year was Rs. 1,40,000.

(c) On March 31, 2016, 10% Investments were purchased for Rs. 1,80,000 and some Investments were sold at a profit of Rs. 20,000. Interest on Investment was received on March 31, 2017.

(d) Amartax Ltd. paid Dividend @ 10% on its shares.

(e) A plot of Land had been purchased for investment purposes and let out for commercial use and rent received Rs. 30,000.

Answer:

Cash Flow from Investing Activities

Particulars

Amount

Rs

Amount

Rs

Cash Inflow

 

 

 

Proceeds from Sale of Patents

1,00,000

 

 

Proceeds from Sale of Machinery

50,000

 

 

Proceeds from Sale of 10% Long-term Investment

1,00,000

 

 

Interest received on 10% Long-term Investment

6,000

 

 

Dividend Received from Amartax Ltd.

10,000

 

 

Rent Received

30,000

2,96,000

Cash Outflow

 

 

 

Purchase of Goodwill

(2,00,000)

 

 

Purchase of Machinery

(4,40,000)

 

 

Purchase of 10% Long-term Investment

(1,80,000)

(8,20,000)

Net Cash used in Investing Activities

 

(5,24,000)

 

 

 

 

 

         

 

Patents Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Balance b/d

 

2,80,000

 

Profit and Loss (written off)

 

40,000

 

Profit and Loss  (Profit on sale)

 

20,000

 

Bank (sale- Balancing figure)

 

1,00,000

 

 

 

 

 

Balance c/d

 

1,60,000

 

 

 

3,00,000

 

 

 

3,00,000

 

 

 

 

 

 

 

 

 

Machinery Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Balance b/d

 

10,20,000

 

Depreciation

 

1,40,000

 

Bank (Purchases- Balancing figure)

 

4,40,000

 

Bank

 

50,000

 

 

 

 

 

Profit and Loss

 

30,000

 

 

 

 

 

Balance c/d

 

12,40,000

 

 

 

14,60,000

 

 

 

14,60,000

 

 

 

 

 

 

 

 

 

10% Long-term Investment Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Balance b/d

 

60,000

 

Bank  (Balancing figure)

 

1,00,000

 

Bank

 

1,80,000

 

 

 

 

 

Profit and Loss (Profit on sale)

 

20,000

 

Balance c/d

 

1,60,000

 

 

 

 

 

 

 

 

 

 

 

2,60,000

 

 

 

2,60,000

 

 

 

 

 

 

 

 

 

 



Page No 285:

Question 7:

From the following Balance Sheet of Mohan Ltd. Prepare cash flow Statement:
 

Balance Sheet of Mohan Ltd.
as at 31 Mar. 2016 and 31 Mar. 2017
Particulars Note No. March 31, 2017
(Rs)
March 31, 2016
(Rs)
I) Equity and Liabilities      
1. Shareholders’ Funds
     
a) Equity share capital
  3,00,000 2,00,000
b) Reserves and surplus
  2,00,000 1,60,000
2. Non-current liabilities
     
a) Long-term borrowings
1  80,000 1,00,000
3. Current liabilities
     
Trade payables
  1,20,000 1,40,000
Short-term provisions
2 70,000 60,000
Total   7,70,000 6,60,000
II) Assets      
1. Non-current assets
     
a) Fixed assets
3 5,00,000 3,20,000
2. Current assets
     
a) Inventories
  1,50,000 1,30,000
b) Trade receivables
  4,90,000 1,20,000
c) Cash and cash equivalents
  5,30,000 90,000
Total    7,70,000 6,60,000

 

 

   

Notes

 

2017 2016
1. Long-term borrowings    
Bank Loan
80,000 1,00,000
2. Short-term provision    
Proposed dividend
70,000 60,000
3. Fixed assets 6,00,000 4,00,000
Less: Accumulated Depreciation
1,00,000 80,000
(Net) Fixed Assets
5,00,000 3,20,000
4. Trade receivables    
Debtors
60,000 1,00,000
Bills receivables
30,000 20,000

 

90,000 1,20,000
5. Cash and cash equivalents    
Bank
30,000 90,000

 

   

Additional Information:
Machine Costing Rs. 80,000 on which accumulated depreciation was Rs. 50,000 was sold for Rs. 20,000.

Answer:

Cash Flow Statement of Mohan Ltd.

 

Particulars

Amount

Rs

Amount

Rs

A.

Cash Flow from Operating Activities

 

 

 

Profit as per the Balance Sheet  (2,00,000 – 1,60,000)

40,000

 

 

Proposed Dividend

70,000

 

 

Net Profit before Taxation and Extraordinary items

 

1,10,000

 

Adjustments:

 

 

 

 

Depreciation

70,000

 

 

 

Loss on Sale of Machine

10,000

80,000

 

Operating Profit before Working Capital changes

 

1,90,000

 

 

Add:

Decrease in Current Assets

 

 

 

 

 

Debtors

40,000

40,000

 

 

 

 

 

2,30,000

 

 

Less:

Increase in Current Assets

 

 

 

 

 

Inventories

(20,000)

 

 

 

 

Bills Receivable

(10,000)

 

 

 

Less:

Decrease in Current Liabilities

 

 

 

 

 

Trade Payables

(20,000)

(50,000)

 

Net Cash from Operations

 

1,80,000

B.

Cash Flow from Investing Activities

 

 

 

 

Proceeds from Sale of Fixed Assets

 

20,000

 

 

Purchases of Fixed Assets

 

(2,80,000)

 

 

Net Cash outflow from Investing activity

 

(2,60,000)

 

 

 

 

 

 

C.

Cash Flow from Financing Activities

 

 

 

 

Issue of Shares

 

1,00,000

 

 

Bank Loan Paid

 

(20,000)

 

 

Dividend Paid

 

(60,000)

 

Net Cash from Financing Activities

 

20,000

 

 

 

 

 

 

D.

Net Decrease in Cash and Cash Equivalents (A+B+C)

 

(60,000)

 

 

Add:

Cash and Cash Equivalents in the beginning

 

90,000

 

 

 

 

E.

Cash and Cash equivalents at the end

 

30,000

 

 

 

 

 

Fixed Assets Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Balance b/d

 

4,00,000

 

Bank

 

20,000

 

Bank (Purchases- Balancing fig.)

 

2,80,000

 

Profit and Loss

 

10,000

 

 

 

 

 

Accumulated Depreciation

 

50,000

 

 

 

 

 

Balance c/d

 

6,00,000

 

 

 

6,80,000

 

 

 

6,80,000

 

 

 

 

 

 

 

 

 

Accumulated Depreciation Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Fixed Assets

 

50,000

 

Balance b/d

 

80,000

 

Balance c/d

 

1,00,000

 

Profit and Loss (Balance fig.)

 

70,000

 

 

 

1,50,000

 

 

 

1,50,000

 

 

 

 

 

 

 

 

 

 



Page No 286:

Question 8:

From the following Balance Sheets of Tiger Super Steel Ltd., prepare Cash Flow Statement:

Balance Sheet of Tiger Super Steel Ltd. as on 31 Mar. 2016 and 31 Mar. 2017
Particulars Note No. March 31, 2017
(Rs)
March 31, 2016
(Rs)
I) Equity and Liabilities      
1. Shareholders’ Funds
     
a) Share capital
1 1,30,000 2,00,000
b) Reserves and surplus
2 22,800 15,200
2. Current Liabilities
     
a) Trade payables
3 21,200 14,000
b) Other current liabilities
4 2,400 3,200
c) Short-term provisions
5 38,400 22,400
Total   2,14,800 1,74,800
II) Assets      
1. Non-Current Assets
     
a) Fixed assets
     
i) Tangible assets
6 96,400 76,000
ii) Intangible assets
  18,800 24,000
b) Non-current investments
  14,000 4,000
2. Current assets
     
a) Inventories
  31,200 34,000
b) Trade receivables
  43,200 30,000
c) Cash and cash equivalents
  11,200 6,800
Total    2,14,800 1,74,800

 

 

   

Notes to accounts:
 
 

2017

2016

1. Share Capital

   

Equity share capital

1,20,000

80,000

10% Preference share capital

20,000

40,000

 

1,40,000

1,20,000

2. Reserves and surplus

   

General reserve

12,000

8,000

Balance in statement of profit and loss

10,800

7,200

 

22,800

15,200

3. Trade payables

   

Bills payable

21,200

14,000

     

4. Other current liabilities

   

Outstanding expenses

2,400

3,200

     

5. Short-term provisions

   

Provision for taxation

12,800

11,200

Proposed dividend

15,600

11,200

 

28,400

22,400

6. Tangible assets

   

Land and building

20,000

40,000

Plant

76,400

36,000

 

96,400

76,000

     

Answer:

Cash Flow Statement of Tiger Super Steels Ltd

 

Particulars

Amount

Rs

Amount

Rs

A.

Cash Flow from Operating Activities

 

 

 

Profit as per the Balance Sheet (10,800 –7,200)

3,600

 

 

General Reserve

4,000

 

 

Proposed Dividend

15,600

 

 

Provision for Taxation

12,800

 

 

Net Profit before Taxation and Extraordinary

 

36,000

 

Items to be added:

 

 

 

 

Depreciation on Land and Building

20,000

 

 

 

Depreciation on Plant

10,000

 

 

 

Goodwill written off

5,200

35,200

 

Operating Profit before Working Capital changes

 

71,200

 

 

 

 

 

 

Add:

Increase in Current Liabilities

 

 

 

 

 

Bills Payable

7,200

 

 

 

Add:

Decrease in Current Assets

 

 

 

 

 

Inventories

2,800

10,000

 

 

 

 

 

81,200

 

 

Less:

Increase in Current Assets

 

 

 

 

 

Trade Receivables

(13,200)

 

 

 

Less:

Decrease in Current Liabilities

 

 

 

 

 

Outstanding Expenses

(800)

(14,000)

 

Cash Generated from Operating Activities

 

67,200

 

 

Less:

Income Tax paid

 

(11,200)

 

Net Cash from Operating Activities

 

56,000

 

 

 

 

 

 

B.

Cash Flow from Investing Activities

 

 

 

 

Purchases of Plant

 

(40,400)

 

 

Purchases of Investment

 

(20,000)

 

Net Cash used in Investing Activities

 

(60,400)

 

 

 

 

 

 

C.

Cash Flow from Financing Activities

 

 

 

 

Issue of Equity Shares

 

40,000

 

 

Dividend paid

 

(11,200)

 

 

Redemption of 10% Preference Shares

 

(20,000)

 

Net Cash from Financing Activities

 

8,800

 

 

 

 

 

 

D.

Net Increase in Cash and Cash Equivalent

 

4,400

 

 

Add:

Cash and Cash Equivalent in the beginning

 

6,800

E.

Cash and Cash Equivalents at the end

 

11,200

 

 

 

 

Working Notes:

1.

Plant Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

To Balance b/d

 

36,000

 

By Depreciation

 

10,000

 

To Bank A/c (Purchases- Balancing figure)

 

50,400

 

By Balance c/d

 

76,400

 

 

 

86,400

 

 

 

86,400

 

 

 

 

 

 

 

 

2.

Net Profit before Tax

3,600

Profit and Loss Account

12,800

Less:

Provision for Tax

16,400

     

Note: As per the solution, the Net Cash from Operating Activities, net Cash from Investing Activities and Net Cash from Financing Activities are Rs 56,000, Rs (60400) and Rs 8,800 respectively. However, as per the answer given in the book, the Net Cash from Operating Activities, net Cash from Investing Activities and Net Cash from Financing Activities are Rs 34,800, Rs (50,400) and Rs 20,000 respectively.



Page No 287:

Question 9:

From the following information, prepare cash flow statement:

 
Particulars Note No. 31st March
2015
(Rs)
31st March
2014
(Rs)
I) Equity and Liabilities      
1. Shareholders’ Funds
     
a) Share capital
  7,00,000 5,00,000
b) Reserves and surplus
  4,70,000 2,50,000
2. Non-current Liabilities
     
(8% Debentures)
  4,00,000 6,00,000
3. Current Liabilities
     
a) Trade payables
  9,00,000 6,00,000
Total   24,70,000 19,50,000
II) Assets      
1. Non-current assets
     
a) Fixed assets
     
i) Tangible
  7,00,000 5,00,000
ii) Intangible-Goodwill
  1,70,000 2,50,000
2. Current assets
     
a) Inventories
  6,00,000 5,00,000
b) Trade Receivables
  6,00,000 4,00,000
c) Cash and cash equivalents
  4,00,000 3,00,000
Total    24,70,000 19,50,000

 

 

   

Additional Information:

Depreciation Charge on Plant amount to Rs. 80,000.

Answer:

Cash Flow Statement

for the year ending March 31, 2015

 

Particulars

Details

(Rs)

Amount

(Rs)

A.

Cash from Operating Activities

 

 

 

Net Profit

 

2,20,000

 

Items to be Added:

 

 

 

Interest on Debentures

48,000

 

 

Depreciation on Fixed Assets

80,000

 

 

Goodwill Written-off

80,000

2,08,000

 

Operating Profit before Working Capital Adjustments

 

4,28,000

 

Add: Increase in Current Liabilities

 

 

 

Creditors

3,00,000

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(1,00,000)

 

 

Trade Receivables

(2,00,000)

-

 

Cash Generated from Operations

 

4,28,000

 

Less: Tax Paid

 

-

 

Net Cash From Operating  Activities 

 

4,28,000

 

 

 

 

B.

Cash From Investing Activities

 

 

 

Purchase of Fixed Assets (WN)

(2,80,000)

 

 

Net Cash From Investing Activities

 

(2,80,000)

 

 

 

 

C.

Cash From Financing Activities

 

 

 

Issue of Share Capital

2,00,000

 

 

Redemption of Debentures

(2,00,000)

 

 

Interest Paid on Debentures

(48,000)

(48,000)

 

Net Cash From Financing Activities (C)

 

(48,000)

 

Net Increase in Cash (A + B + C)

 

1,00,000

 

Add: Opening Cash and Cash Equivalents

 

3,00,000

 

Closing Cash and Cash Equivalents

 

4,00,000

 

 

 

 

 

Working Note:

Fixed Assets Account

Dr.

 

Cr.

Particulars

J.F.

Amount

(Rs)

Particulars

J.F.

Amount

(Rs)

Balance b/d

 

5,00,000

Depreciation

 

80,000

Purchases (Balancing Figure)

 

2,80,000

Balance c/d

 

7,00,000

 

 

 

 

 

 

 

 

7,80,000

 

 

7,80,000

 

 

 

 

 

 

 



Page No 288:

Question 10:

From the following Balance Sheet of Yogeta Ltd., prepare cash flow statement:

 
Particulars Note No. 31st March
2017
(Rs)
31st March
2016
(Rs)
I) Equity and Liabilities      
1. Shareholders’ Funds
     
a) Share capital
1 4,00,000 2,00,000
b) Reserves and surplus-Surplus
  2,00,000 1,00,000
2. Non-current Liabilities
     
a) Long-term borrowings
2 1,50,000 2,20,000
3. Current Liabilities
     
a) Short-term borrowings
  1,00,000 -
(Bank overdraft)
     
b) Trade payables
  70,000 50,000
c) Short-term provision
  50,000 30,000
(Provision for taxation)
     
Total   9,70,000 6,00,000
II) Assets      
1. Non-current assets
     
a) Fixed assets
     
i) Tangible
  7,00,000 4,00,000
2. Current assets
     
a) Inventories
  1,70,000 1,00,000
b) Trade Receivables
  1,00,000 50,000
c) Cash and cash equivalents
  - 50,000
Total    9,70,000 6,00,000

 

 

   

Notes to Accounts

Particulars 31st March
2017
(Rs)
31st March
2016
(Rs)
1. Share capital    
a) Equity share capital
3,00,000 2,00,000
b) Preference share capital
1,00,000 -
  4,00,000 2,00,000
2. Long term borrowings    
Long-term loan
- 2,00,000
Long-term Rahul
1,50,000 20,000
  1,50,000 2,20,000

 

 

 


Additional Information:
Net Profit for the year after charging Rs. 50,000 as Depreciation was Rs. 1,50,000. Dividend paid on Share was Rs. 50,000, Tax Provision created during the year amounted to Rs. 60,000.

Answer:

 

Cash Flow Statement of Yogeta Ltd.

 

 

Particulars

Amount

Rs

Amount

Rs

A.

Cash Flow from Operating Activities

 

 

 

Profit as per Balance Sheet (2,00,000 –1,00,000)

1,00,000

 

 

Proposed Dividend

50,000

 

 

Provision for Taxation

60,000

 

 

Net Profit before Taxation and Extraordinary items

 

2,10,000

 

Items to be added:

 

 

 

Depreciation

50,000

50,000

 

Operating Profit before Working Capital changes

 

2,60,000

 

Add: Increase in Current liabilities

 

 

 

Trade Payable

20,000

20,000

 

 

 

 

 

2,80,000

 

Less: Increase in Current Assets

 

 

 

Inventories

(70,000)

 

 

Trade Receivable

(50,000)

(1,20,000)

 

Cash Generated from Operating Activities

 

1,60,000

 

 

 

 

 

Less: Income Tax paid

 

(40,000)

 

Net Cash from Operations

 

1,20,000

 

 

 

 

 

 

B.

Cash Flow from Investing Activities

 

 

 

Purchases of Fixed Assets

 

(3,50,000)

 

Net Cash used in Investing Activities

 

(3,50,000)

 

 

 

 

 

 

C.

Cash Flow from Financing Activities

 

 

 

Issue of Equity Shares

 

1,00,000

 

Issue of Preference Shares

 

1,00,000

 

Loan from Rahul

 

1,30,000

 

Less: Repayment of Loan

 

(2,00,000)

 

Dividend Paid

 

(50,000)

 

Net Cash from Financing Activities

 

80,000

 

 

 

 

 

 

D.

Net decrease in Cash and Cash Equivalent (A+B+C)

 

(1,50,000)

 

Add: Cash and Cash Equivalents in the beginning

 

50,000

E.

Cash and Cash Equivalents at the end (Bank Overdraft)

 

(1,00,000)

 

 

 

 

 

 

 

Working Notes:

1.

Provision for Taxation Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Bank (Balancing figure)

 

40,000

 

Balance b/d

 

30,000

 

Balance c/d

 

50,000

 

Profit and Loss

 

60,000

 

 

 

90,000

 

 

 

90,000

 

 

 

 

 

 

 

 

 

2.

Fixed Assets Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Balance b/d

 

4,00,000

 

Depreciation

 

50,000

 

Bank

 

3,50,000

 

Balance c/d

 

7,00,000

 

 

 

7,50,000

 

 

 

7,50,000

 

 

 

 

 

 

 

 

 

 



Page No 289:

Question 11:

Following is the Financial Statement of Garima Ltd., prepare cash flow statement.

 
Particulars Note No. 31st March
2017
(Rs)
31st March
2016
(Rs)
I) Equity and Liabilities      
1. Shareholders’ Funds
     
a) Share capital
1 4,40,000 2,80,000
b) Reserve and surplus-Surplus
2 40,000 28,000
2. Current Liabilities
     
a) Trade payables
  1,56,000 56,000
c) Short-term provisions
  12,000 4,000
(Provision for taxation)
     
Total   6,48,000 3,68,000
II) Assets      
1. Non-current assets
     
a) Fixed assets
     
i) Tangible
  3,64,000 2,00,000
2. Current assets
     
a) Inventories
  1,60,000 60,000
b) Trade receivables
  80,000 20,000
c) Cash and cash equivalents
  28,000 80,000
d) Other current assets
  16,000 8,000
Total    6,48,000 3,68,000

 

 

   

Notes to Accounts

Particulars 31st March
2017
(Rs)
31st March
2016
(Rs)
1. Share capital    
a) Equity share capital
3,00,000 2,00,000
b) Preference share capital
1,40,000 80,000
  4,40,000 2,80,000
2. Reserve and surplus    
Surplus in statement of profit and loss at the beginning of the year
28,000  
Add: Profit of the year
16,000  
Less: Dividend
4,000  
Profit at the end of the year 40,000  

 

 

 

Additional Information:

  1. Interest paid on Debenture Rs 600
  2. Dividend paid during the year Rs 4,000
  3. Depreciation charged during the year Rs 32,000

Answer:

 

Cash Flow Statement (Indirect Method)

 

Particulars

Amount

Rs

Amount

Rs

A.

Cash Flow from Operating Activities

 

 

 

Profit as per Balance Sheet  (40,000 – 28,000)

12,000

 

 

Proposed Dividend

4,000

 

 

Provision for Taxation

12,000

 

 

Net Profit before Taxation and Extraordinary items

 

28,000

 

Items to be added:

 

 

  Interest paid on Debentures 600  

 

Depreciation

32,000

32,600

 

Operating Profit before Working Capital changes

 

60,600

 

Add: Increase in Current liabilities

 

 

 

Trade Payables

1,00,000

 

 

Less: Increase in Current Assets

 

 

 

Other Current Assets

(8,000)

 

 

Inventories

(1,00,000)

 

 

Trade Receivables

(60,000)

(68,000)

 

Cash generated from Operating Activities

 

(7,400)

 

 

 

 

 

Less: Income Tax paid

 

(4,000)

 

Net Cash used in Operating Activities

 

(11,400)

 

 

 

 

 

 

B.

Cash Flow from Investing Activities

 

 

 

Purchase of Fixed Assets

 

(1,96,000)

 

Net Cash used in Investing Activities

 

(1,96,000)

 

 

 

 

 

 

C.

Cash Flow from Investing Activities

 

 

 

Issue of Equity Shares

 

1,00,000

 

Issue of Preference Shares

 

60,000

      Less: Interest Paid on Debentures   (600)

 

Less: Dividend Paid

 

(4,000)

 

Net Cash from Financing Activities

 

1,55,400

 

 

 

 

 

 

D.

Net decrease in cash and cash equivalent (A+B+C)

 

(52,000)

 

Add: Cash and Cash Equivalents in the beginning

 

80,000

E.

Cash and Cash Equivalents at the end

 

28,000

 

 

 

 

 

 

           

Working Notes:

 

Plant and Machinery Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Balance b/d

 

2,00,000

 

Depreciation

 

32,000

 

Bank (Purchases- Balancing fig.)

 

1,96,000

 

Balance c/d

 

3,64,000

 

 

 

3,96,000

 

 

 

3,96,000

 

 

 

 

 

 

 

 

 



Page No 290:

Question 12:

From the following Balance Sheet of Computer India Ltd., prepare cash flow statement.

 

(Rs in '000)

Particulars Note No. 31st March
2017
(Rs)
31st March
2016
(Rs)
I) Equity and Liabilities      
1. Shareholders’ Funds
     
a) Share capital
  50,000 40,000
b) Reserves and surplus-Surplus
1 3,700 3,000
2. Non-Current Liabilities
     
10% Debentures
  6,500 6,000
3. Current Liabilities
     
a) Short-term borrowings
2 6,800 12,500
b) Trade payables
  11,000 12,000
c) Short-term provisions
3 10,000 8,000
Total   88,000 81,500
II) Assets      
1. Non-current assets
     
a) Fixed assets
4 25,000 30,000
2. Current assets
     
a) Inventories
  35,000 30,000
b) Trade receivables
  24,000 20,000
c) Cash and cash equivalents-cash
  3,500 1,200
d) Other current assets-prepaid exp.
  500