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Page No 3.100:

Answer:

Cash Flow from Operating Activities
For the Year Ending March 31, 2017
Particulars Details (Rs) Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   2,50,000
+ Provision for Tax   1,50,000
+ Reserve   2,00,000
+ Dividend    
Add: Non Operating Expenses
   
Depreciation 2,50,000  
Goodwill written off 80,000  
Loss on Sale of Machinery 2,50,000 5,80,000
Less: Non Operating Incomes
 
     
Operating Profit Before Working Capital Changes   11,80,000
Add: Decrease in Current Assets & Increase in Current Liabilities
   
Debtors 1,28,000  
O/standing Expenses 15,000  
Prepaid Expenses 20,000 1,63,000
Less: Increase in Current Assets & Decrease in Current Liabilities
   
Bills Payable (47,000)  
Current Investments (1,50,000) (1,97,000)
Cash From Operating Activities   11,46,000
Less: Tax Paid
  (3,50,000)
Net Cash From Operating Activities (A)   7,96,000
     

Page No 3.100:

Answer:

Cash Flow from Operating Activities
For the Year Ending March 31,2015
Particulars Details (Rs) Amount (Rs)
Cash Flow from Operating Activities    
Net Profit   18,000
+ Provision for Tax   50,000
+ General Reserve   30,000
+ Proposed Dividend   50,000
Add: Non Operating Expenses
   
Depreciation 30,000 30,000
Goodwill written off 25,000 25,000
Loss on Sale of Machinery    
Less: Non Operating Incomes
 
     
Operating Profit Before Working Capital Changes   2,03,000
Add: Decrease in Current Assets & Increase in Current Liabilities
   
Stock 10,000  
Creditors 28,000 38,000
Less: Increase in Current Assets & Decrease in Current Liabilities
   
Debtors (92,000)  
O/Standing Current Liabilities (4,000) (96,000)
Cash From Operating  Activities   1,45,000
Less: Tax Paid
  (40,000)
Net Cash From Operating  Activities (A)   1,05,000
     



Page No 3.101:

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss

 

1,80,000

 

Add: Tax Expense

 

64,000

 

Profit Before Taxation

 

2,44,000

 

Items to be Added:

 

 

 

Loss on Sale of Assets

36,000

 

 

Depreciation and Amortisation Expenses

1,85,000

2,21,000

 

 

 

4,65,000

 

Items to be Deducted:

 

 

 

Dividend Received

(5,000)

 

 

Profit on Sale of Plant

(40,000)

(45,000)

 

Operating Profit before Working Capital Adjustments

 

4,20,000

 

Less: Decrease in Current Liabilities

 

 

 

Office Expenses Outstanding

 

(5,000)

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

28,000

 

 

Selling Expenses Outstanding

3,000

31,000

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

(37,000)

 

 

  Inventories

16,000

(21,000)

 

Cash Generated from Operations

 

4,25,000

 

Less: Tax Paid

 

(64,000)

 

Net Cash Flows from Operating Activities

 

3,61,000



Page No 3.102:

Answer:

 

Cash Flow Statement 

for the year ended March 31, 2017

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss

(60,000)

 

 

Profit Before Taxation

 

(60,000)

 

Items to be Added:

 

 

 

Depreciation on Machinery

60,000

 

 

Goodwill Written Off

40,000

 

 

Loss on Sale of Machinery

1,00,000

 

 

Items to be Deducted:

 

 

 

Dividend Received

(40,000)

1,60,000

 

Operating Profit before Working Capital Adjustments

 

1,00,000

 

Less: Increase in Current Assets

 

 

 

 

Accrued Commission

(20,000)

 

 

 

Increase in Inventory

(20,000)

(40,000)

 

Add: Increase in Current Liabilities

 

 

 

 Outstanding Rent

40,000

 

 

 Outstanding Wages

60,000

1,00,000

 

Cash Generated from Operations

 

1,60,000

 

Less: Tax Paid

 

-

 

Net Cash Flows from Operating Activities

 

1,60,000

 

 

 

 

 



Page No 3.103:

Answer:

 

Cash Flow Statement 

for the year ended March 31, 2017

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss

 

1,00,000

 

Profit Before Taxation

 

 

 

Items to be Added:

 

 

 

Depreciation on Machinery

 

25,000

 

Operating Profit before Working Capital Adjustments

 

1,25,000

 

Less: Increase in Current Assets

 

 

 

 

Prepaid Expenses

(5,000)

 

 

Add: Decrease in Current Assets

 

 

 

Inventory

50,000

 

 

Trade Receivables

30,000

 

 

Add: Increase in Current Liabilities

 

 

 

 Outstanding Expenses

3,000

 

 

Less: Decrease in Current Liabilities

 

 

 

 Trade Payables

(15,000)

63,000

 

Cash Generated from Operations

 

1,88,000

 

Less: Tax Paid

 

-

 

Net Cash Flows from Operating Activities

 

1,88,000

 

 

 

 

Page No 3.103:

Answer:

Cash From Investing  Activities
For the Year Ending …….
Particulars Details
(Rs)
Amount
(Rs)
Cash From Investing  Activities    
Purchase of Investment (5,00,000)  
Proceeds from Sale of Investments 6,00,000  
Purchase of Goodwill (2,50,000)  
Purchase of Machinery (7,40,000)  
Proceeds from Sale of Machinery 1,00,000  
Proceeds from Sale of Patents 1,00,000  
Interest received on Investments 80,000  
Dividend Received on Shares 40,000  
Rent Received ( Land used for Commercial Purpose) 80,000  
     
Net Cash From Investing Activities   (4,90,000)
     

Page No 3.103:

Answer:

Cash From Investing  Activities
For the Year Ending March 31, 2017
Particulars Details
(Rs)
Amount
(Rs)
Cash From Investing  Activities    
     
Purchase of Patents (40,000)  
Proceeds from Sale of Land 40,000  
Purchase of Furniture (4,60,000)  
Proceeds from Sale of Investment 40,000  
Accrued Interest on Investment 20,000  
     
Net Cash From Investing Activities    (4,00,000)
     
     



Page No 3.104:

Answer:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

 

Purchase of Machinery (WN1)

(60,000)

 

 

 

Sale of Machinery

20,000

 

 

 

Sale of Patents (WN3)

1,00,000

60,000

 

Net Cash Used in Investing Activities

 

60,000

 

Working Notes:

 

WN 1:

 

Machinery Account

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

4,00,000

Provision for Depreciation A/c

24,000

Profit and Loss A/c (Profit on Sale)

4,000

Bank A/c (Sale)

20,000

Bank A/c (Purchase)

60,000

Balance c/d

4,20,000

 

4,64,000

 

4,64,000

 

 

 

 

 

 

WN2:

Patents Account

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

2,80,000

Patents Written off

40,000

Profit and Loss A/c (Profit on Sale)

20,000

Bank A/c (Sale) (Balancing Figure)

1,00,000

 

 

Balance c/d

1,60,000

 

3,00,000

 

3,00,000

 

 

 

 

 

 

WN3:

 

Provision for Depreciation Account

Dr.

 

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Asset A/c

60,000

Balance b/d

1,10,000

Balance c/d

1,50,000

Profit and Loss A/c (Depreciation charged during the year)

1,00,000

 

2,10,000

 

2,10,000

 

 

 

 

 

 

 

Page No 3.104:

Answer:

Cash From Investing Activities
For the Year Ending March 31, 2015
Particulars Details (Rs) Amount (Rs)
Cash From Investing Activities    
     
Proceeds from Sale of Investments (2,50,000 + 10%) 2,75,000  
Interest received on Investments 70,000  
Dividend Received on Investment 30,000  
Purchase of Investment (7,50,000)  
Rent Received 20,000  
Purchase of Fixed Assets (23,80,000 + 2,00,000 – 19,50,000) (6,30,000)  
     
Net Cash From Investing Activities   (9,85,000)
     
     

Page No 3.104:

Answer:

Cash From Investing  Activities
For the Year Ending …..
Particulars Details
(Rs)
Amount
(Rs)
Cash From Investing  Activities    
Purchase of Land (5,00,000)  
Purchase of Investment (2,70,000)  
Purchase of Machinery (4,50,000)  
Proceeds from Sale of Building 6,00,000  
Proceeds from Sale of Investments 1,60,000  
Proceeds from Sale of Machinery 2,10,000  
Interest received 20,000  
Dividend Received 30,000  
Rent Received 90,000 (1,10,000)
     
Net Cash From Investing Activities   (1,10,000)
     

Page No 3.104:

Answer:

Cash From Investing  Activities
For the Year Ending March 31, 2017
Particulars Details
(Rs)
Amount
(Rs)
Cash From Investing  Activities    
     
Purchase of Plant & Machinery (2,60,000)  
Proceeds from Sale of Plant & Machinery 40,000  
Proceeds from Sale of Land 1,60,000  
Purchase of Investment (60,000) (1,20,000)
     
Net Cash From Investing Activities    (1,20,000)
     

Working Notes:-

Plant & Machinery Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 8,50,000 Depreciation A/c 50,000
Bank A/c (Purchases)
(Balancing Figure)
2,60,000 Sales A/c 40,000
    P& L A/c ( Loss) 20,000
    Balance c/d 10,00,000
       
  11,10,000   11,10,000
       

Land Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 2,00,000 Sales A/c (Balancing Figure) 1,60,000
P& L A/c (Profit) 60,000 Balance c/d 1,00,000
       
  2,60,000   2,60,000
       



Page No 3.105:

Answer:

Cash From Investing  Activities
For the Year Ending March 31,2017
Particulars Details
(Rs)
Amount
(Rs)
Cash From Investing  Activities    
Purchase of Goodwill (1,00,000)  
Purchase of Investment (1,80,000)  
Purchase of Machinery (4,40,000)  
Proceeds from Sale of Patents 1,00,000  
Proceeds from Sale of Investments 1,00,000  
Proceeds from Sale of Machinery 50,000  
Interest on Investment received 7,200  
Dividend Received on Investment 10,000  
Rent Received 20,000  
     
Net Cash From Investing Activities   4,32,800
     

Working Notes:-  
Machinery Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 10,20,000 Depreciation A/c 1,40,000
Bank A/c ( Purchases)
(Balancing Figure)
4,40,000 Bank A/c 50,000
    P& L A/c ( Loss) 30,000
    Balance c/d 12,40,000
       
  14,60,000   14,60,000
       

Patents Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 3,80,000 P& L A/c ( Loss) 40,000
P& L A/c ( Profit) 20,000 Sales A/c (Balancing Figure) 1,00,000
    Balance c/d 2,60,000
       
  14,60,000   14,60,000
       
 
Investment  Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 60,000 Sales A/c (Balancing Figure) 1,00,000
Bank A/c 1,80,000 Balance c/d 1,60,000
P& L A/c ( Profit) 20,000    
       
       
  2,60,000   2,60,000
       

Page No 3.105:

Answer:

Cash From Financing Activities
For the Year Ending March 31,2017
Particulars Details
(Rs)
Amount
(Rs)
Cash From Financing Activities    
Interest Paid on Debentures (19,000)  
Dividend Paid (50,000)  
Proceeds from Issue of Share Capital 2,00,000  
Proceeds from Issue of Debenture 1,00,000 2,31,000
     
Net Cash From Financing Activities   2,31,000
     

Page No 3.105:

Answer:

Cash From Investing Activities
For the Year Ending March 31, 2017
Particulars Details
(Rs)
Amount
(Rs)
Cash From Investing Activities    
     
Proceeds from Sale of Plant & Machinery 2,50,000  
Purchase of Plant & Machinery (8,00,000 + 2,50,000 – 6,00,000) (4,50,000)  
Purchase of Non Current Investment (50,000)  
     
Net Cash From Investing Activities   (2,50,000)
     



Page No 3.106:

Answer:

Cash From Investing  Activities
For the Year Ending March 31, 2017
Particulars Details (Rs) Amount
(Rs)

Cash From Investing  Activities

   
     
Dividend Received on Investment 5,000  
Sale of Non Current Investments 2,00,000  
     
Net Cash From Investing Activities    2,05,000
     

Page No 3.106:

Answer:

Cash From Financing Activities
For the Year Ending March 31,2017
Particulars Details (Rs)
Amount
(Rs)
Cash From Financing Activities    
Interest Paid on Debentures (18,000)  
Proceeds from Issue of Share Capital (1,00,000 +10,000) 1,10,000  
Redemption of Debenture (50,000 + 5,000) (55,000)  
     
Net Cash From Financing Activities   37,000
     



Page No 3.107:

Answer:

Cash From Financing Activities
For the Year Ending March 31, 2017
Particulars Details
(Rs)
Amount
(Rs)
Cash From Financing Activities    
Interest Paid on Debentures (10,000)  
Dividend Paid (50,000)  
Proceeds from Issue of Share Capital 2,00,000  
Redemption of 10% Debenture (2,00,000)  
Proceeds from Issue of 8% Debenture 3,00,000  
Repayment of Bank Loan (1,50,000)  
Bank Overdraft 50,000  
Interest paid on Bank Overdraft (1,000)  
Net Cash From Financing Activities   1,39,000
     

Page No 3.107:

Answer:

Cash From Financing Activities
For the Year Ending March 31, 2017
Particulars Details
(Rs)
Amount
(Rs)
Cash From Financing Activities    
Dividend Paid on Preference Share Capital (4,00,000 × 10%) (40,000)  
Interim Dividend Paid (6,00,000 × 15%) (90,000)  
Redemption of Preference Shares (2,00,000 + 5%) (2,10,000)  
Proceeds from Issue of Equity Share Capital 2,00,000  
Premium Received from Equity Share 25,000  
Proceeds from Issue of Debentures 2,00,000  
Interest Paid on Debentures (48,000 – 9,600) (38,400)  
     
Net Cash From Financing Activities   46,600
     



Page No 3.108:

Answer:

Cash From Financing Activities
For the Year Ending March 31,2017
Particulars Details
(Rs)
Amount
(Rs)
Cash From Financing Activities    
Proceeds from Issue of Equity Share Capital (15,00,000+ 75,000) 15,75,000  
Share Issue Expenses Paid (1,75,000)  
Bank Overdraft 1,00,000  
Net Cash From Financing Activities   15,00,000
     

Page No 3.108:

Answer:

Calculation of Cash from Financing Activities:

 

Cash Flow Statement 

for the year ended March 31, 2011

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Cash Flow from Financing Activities

 

 

 

Issue of Share Capital

2,00,000

 

 

Redemption of Preference Share Capital

(1,00,000)

 

 

Security Premium Reserve

35,000

 

 

Issue of 11% Debentures

1,00,000

 

 

Preference Dividend paid

(30,000)

 

 

Interest on Debentures paid

(55,000)

 

 

Equity Dividend paid

(36,000)

 

 

 

 

 

 

Net Cash Flows from Financing Activities

 

1,14,000

 

 

 

 

 



Page No 3.109:

Answer:

 

Cash Flow Statement 

for the year ended March 31, 2017

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss

7,25,000

 

 

Provision for Tax

1,12,500

 

 

Equity Dividend

90,000

 

 

Preference Dividend

37,500

 

 

General Reserve

75,000

 

 

Profit Before Taxation

 

10,40,000

 

Items to be Added:

 

 

 

Interest on Debentures

41,000

 

 

Interest on Bank Loan

9,000

50,000

 

Operating Profit before Working Capital Adjustments

 

10,90,000

 

Less: Increase in Current Assets

 

 

 

 

      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: Tax Paid

 

(62,500)

 

Net Cash Flows from Operating Activities

 

11,27,500

 

 

 

 

 

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Share Capital

2,50,000

 

 

Equity Dividend paid

     (90,000)

 

 

Redemption of Preference Share Capital

   (2,50,000)

 

 

Preference Dividend paid

      (37,500)

 

 

Proceeds from Issue of Debentures

     2,75,000

 

 

Interest on Debentures Paid

     (41,000)

 

 

 Security Premium Reserve

25,000

 

 

Repayment of bank loan

(25,000)

 

 

Interest on Bank Loan Paid

(9,000)

 

 

Net Cash Flow from Financing Activities

 

97,500

 

 

 

 

           

 

Working Note:

1. If Equity dividend is paid, it is assumed Preference Dividend is also paid.

2. Interest  on  Debentures  Paid=[3,75,000×8100 ×612+ 2,75,000×8100 ×612]  = Rs 41,0003. Interest  on  Bank  Loan  Paid=[1,25,000×8100×612+1,00,000×8100 ×612] = Rs 25,000

4.

Provision for Taxation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Bank A/c (Tax Paid)

62,500

Balance b/d

50,000

(Bal. Fig.)

 

Profit and Loss A/c

1,12,500

Balance c/d

1,00,000

 

 

 

1,62,500

 

1,62,500

 

 

 

 

Page No 3.109:

Answer:

Cash Flow from Operating Activities
For the Year Ending March 31, 2017
Particulars Details
(Rs)
Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   5,00,000
+ Provision for Tax    
+ Reserve    
+ Dividend    
  Add: Non Operating Expenses    
Premium on Redemption of Preference Share 25,000 25,000
Interim Dividend 2,40,000 2,40,000
Proposed Dividend (10, 00,000 × 10%) 1,00,000 1,00,000
     
  Less: Non Operating Incomes  
     
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 From Operating  Activities   9,65,000
    Less: Tax Paid   -
Net Cash From Operating  Activities (A)   9,65,000
     
Cash From Financing Activities    
Redemption of Preference Shares Capital (5, 00,000 + 5%) (5,25,000)  
Interim Dividend Paid (30, 00,000 × 8%) (2,40,000)  
Preference Dividend Paid (1,00,000)  
Proceeds from Public Deposits (1,00,000)  
Proceeds from Issue of Equity Share Capital 10,00,000  
Proceeds from Security Premium 2,00,000  
     
Net Cash From Financing Activities (C)   3,35,000
     

Page No 3.109:

Answer:

Cash From Financing Activities
For the Year Ending March 31, 2017
Particulars Details (Rs) Amount
(Rs)
Cash From Financing Activities    
Proceeds from Issue of Share Capital 2,50,000  
Interest Paid on Debentures (50,000)  
Cash Credit 25,000  
Net Cash From Financing Activities (C)   2,25,000
     

Note: There is a misprint in the answer given in the textbook. It should be 'Cash Flows from Financing Activities' instead of 'Cash Used in Financing Activities'.



Page No 3.110:

Answer:

Cash Flow Statement
For the Year Ending March31,2014
Particulars Details
(Rs)
Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   10,000
+ Provision for Tax    
+ Reserve    
+ Dividend    
  Add: Non Operating Expenses    
Goodwill Written Off 15,000 15,000
  Less: Non Operating Incomes  
     
Operating Profit Before Working Capital Changes   25,000
  Add: Decrease in Current Assets & Increase in Current Liabilities    
Creditors 35,000  
Debtors 28,000 63,000
  Less: Increase in Current Assets & Decrease in Current Liabilities    
O/standing Expenses (12,000)  
Inventories (80,000) (92,000)
     
Cash From Operating  Activities   (4,000)
  Less: Tax Paid  
Net Cash From Operating  Activities (A)   (4,000)
     
Cash From Investing  Activities    
     
Purchase of Fixed Assets (1,23,000)  
     
Net Cash From Investing Activities (B)   (1,23,000)
     
Cash From Financing Activities    
Proceeds from Mortgage Loan 30,000  
Repayment of Public Deposits (60,000)  
Proceeds from Issue of Share Capital 1,00,000  
     
Net Cash From Financing Activities (C)   70,000
Net decrease in Cash (A + B + C)   (57,000)
  Add: Opening Cash and Cash Equivalents   90,000
(Cash + Marketable Investments- Bank Overdraft)    
Closing Cash and Cash Equivalents   33,000
(Cash + Marketable Investments- Bank Overdraft)    
     



Page No 3.111:

Answer:

Cash Flow Statement
For the Year Ending March 31,2017
Particulars Details
(Rs)
Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   9,000
+ Provision for Tax   32,000
+ General Reserve   10,000
+ Proposed Dividend   39,000
  Add: Non Operating Expenses    
Goodwill Written Off 10,000 10,000
  Less: Non Operating Incomes  
     
     
Operating Profit Before Working Capital Changes   1,00,000
  Add: Decrease in Current Assets & Increase in Current Liabilities    
Inventories 7,000  
Creditors 18,000 25,000
  Less: Increase in Current Assets & Decrease in Current Liabilities    
Debtors (33,000)  
Other Current Liabilities (2,000) (35,000)
     
Cash From Operating  Activities   90,000
  Less: Tax Paid   (28,000)
Net Cash From Operating  Activities (A)   62,000
     
Cash From Investing  Activities    
Purchase of Plant (1,01,000)  
Purchase of Investment (25,000)  
Proceeds from Sale of Land & Building 53,000 (73,000)
Net Cash From Investing Activities (B)   (73,000)
     
Cash From Financing Activities    
Proposed Dividend (28,000)  
Proceeds from Share Capital 50,000 22,000
     
Net Cash From Financing Activities (C)   22,000
Net Increase in Cash (A + B + C)   11,000
Add: Opening Cash and Cash Equivalents   17,000
(Cash + Marketable Investments- Bank Overdraft)    
Closing Cash and Cash Equivalents   28,000
(Cash + Marketable Investments- Bank Overdraft)    
     

Page No 3.111:

Answer:

Cash Flow Statement
For the Year Ending March 31, 2017
Particulars Details (Rs) Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   2,000
+ Provision for Tax    
+ General Reserve   20,000
+ Dividend    
  Add: Non Operating Expenses    
Depreciation on Plant 30,000  
Depreciation on Building 50,000  
Goodwill Written Off 10,000 90,000
  Less: Non Operating Incomes  
     
Operating Profit Before Working Capital Changes   1,12,000
  Add: Decrease in Current Assets & Increase in Current Liabilities    
     
     
  Less: Increase in Current Assets & Decrease in Current Liabilities    
Debtors (40,000)  
Inventories (2,000)  
Creditors (18,000) (60,000)
     
Cash From Operating  Activities   52,000
  Less: Tax Paid  
Net Cash From Operating  Activities (A)   52,000
     
Cash From Investing  Activities    
Purchase of Plant (60,000)  
Purchase of Building (30,000) (90,000)
     
Net Cash From Investing Activities (B)   (90,000)
     
Cash From Financing Activities    
Proceeds from Issue of Share Capital 50,000  
Redemption of Preference Share Capital (10,000) 40,000
     
Net Cash From Financing Activities (C)   40,000
Net Increase in Cash (A + B + C)   2,000
  Add: Opening Cash and Cash Equivalents   15,000
(Cash + Marketable Investments- Bank Overdraft)    
Closing Cash and Cash Equivalents   17,000
(Cash + Marketable Investments- Bank Overdraft)    
     

Working Notes:-  

Plant Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 40,000 Depreciation 30,000
Cash A/c (Balancing Figure) 60,000 Balance c/d 70,000
       
  1,00,000   1,00,000
       

Building Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 1,00,000 Depreciation 5,00,000
Cash A/c (Balancing Figure) 30,000 Balance c/d 80,000
       
  1,30,000   1,30,000
       



Page No 3.112:

Answer:

Cash Flow Statement
For the Year Ending March 31,2017
Particulars Details
(Rs)
Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   18,000
+ Provision for Tax   45,000
+ General Reserve   30,000
+ Interim Dividend   20,000
+ Proposed Dividend   50,000
+ Share Issue Expenses   5,000
  Add: Non Operating Expenses    
Depreciation on Plant 10,000  
Depreciation on Building 20,000  
Goodwill Written Off 25,000 55,000
  Less: Non Operating Incomes  
     
Operating Profit Before Working Capital Changes   2,23,000
  Add: Decrease in Current Assets & Increase in Current Liabilities    
Creditors 28,000 28,000
  Less: Increase in Current Assets & Decrease in Current Liabilities    
Debtors (40,000)  
Inventories (32,000)  
Bills Receivable (10,000)  
Bills Payable (4,000) (86,000)
Cash From Operating  Activities   1,65,000
  Less: Tax Paid   (35,000)
Net Cash From Operating  Activities (A)   1,30,000
     
Cash From Investing  Activities    
Purchase of Plant (1,20,000) (1,20,000)
     
Net Cash From Investing Activities (B)   (1,20,000)
     
Cash From Financing Activities    
Payment of Share Issue Expenses (5,000)  
Interim Dividend (20,000)  
Payment of Proposed Dividend (42,000)  
Proceeds from Issue of Share Capital 1,00,000  
Payment of Land & Building (50,000) (17,000)
     
Net Cash From Financing Activities (C)   (17,000)
Net Increase in Cash (A + B + C)   (7,000)
Add: Opening Cash and Cash Equivalents   25,000
(Cash + Marketable Investments- Bank Overdraft)    
Closing Cash and Cash Equivalents   18,000
(Cash + Marketable Investments- Bank Overdraft)    
     

Working Notes:-
  Plant Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 80,000 Depreciation 10,000
Cash A/c (Balancing Figure) 1,20,000 Balance c/d 1,90,000
       
  2,00,000   2,00,000
       
 
Building Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 2,00,000 Depreciation 20,000
    Balance c/d 1,80,000
       
  2,00,000   2,00,000
       
 
Provision for Tax Account
Dr.   Cr.
Particulars Amount (Rs) Particulars Amount
(Rs)
Cash A/c 35,000 Balance b/d 40,000
Balance c/d 50,000 P/ L A/c 45,000
       
  85,000   85,000
       



Page No 3.113:

Answer:

Cash Flow Statement
For the Year Ending March 31, 2017
Particulars Details
(Rs)
Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   10,000
+ Provision for Tax  
+ General Reserve   20,000
+ Interim Dividend  
+ Proposed Dividend   30,000
+ Share Issue Expenses   7,000
  Add: Non Operating Expenses    
Depreciation on Fixed Assets 50,000  
Debenture Interest 10,000 60,000
Less: Non Operating Incomes  
     
Operating Profit Before Working Capital Changes   1,27,000
  Add: Decrease in Current Assets & Increase in Current Liabilities    
Creditors 40,000 40,000
  Less: Increase in Current Assets & Decrease in Current Liabilities    
Debtors (18,000)  
Current Investments (20,000)  
Inventories (20,000) (58,000)
     
Cash From Operating  Activities   1,09,000
  Less: Tax Paid  
Net Cash From Operating  Activities (A)   1,09,000
     
Cash From Investing  Activities    
Purchase of Fixed Assets (93,000)  
Purchase of Investment (10,000) (1,03,000)
Net Cash From Investing Activities (B)   (1,03,000)
     
Cash From Financing Activities    
Proceeds from Issue of Share Capital 40,000  
Proposed  Dividend (20,000)  
Share Issue Expenses Paid (7,000)  
Debenture Interest Paid (10,000)  
Repayment of Land & Building (10,000) (7,000)
     
Net Cash From Financing Activities (C)   (7,000)
Net Increase in Cash (A + B + C)   (1,000)
Add: Opening Cash and Cash Equivalents   3,000
Closing Cash and Cash Equivalents   2,000
     
     

Working Notes:-
Fixed Asset Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 3,97,000 Depreciation 50,000
Cash A/c (Balancing Figure) 93,000 Balance c/d 4,40,000
        
  4,90,000   4,90,000
       



Page No 3.114:

Answer:

Cash Flow Statement
For the Year Ending March 31, 2017
Particulars Details (Rs) Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   25,000
+ Provision for Tax   23,000
+ General Reserve  
+ Interim Dividend  
+ Proposed Dividend   15,000
  Add: Non Operating Expenses    
Depreciation on Fixed Assets 80,000  
Debenture Interest 10,600  
Goodwill Written Off 25,000 1,15,600
  Less: Non Operating Incomes  
     
Operating Profit Before Working Capital Changes   1,78,600
  Add: Decrease in Current Assets & Increase in Current Liabilities    
Other Assets 8,000 8,000
  Less: Increase in Current Assets & Decrease in Current Liabilities    
Debtors (30,000)  
Creditors (5,000)  
Inventories (20,000) 55,000
     
Cash From Operating  Activities   1,31,600
  Less: Tax Paid   (18,000)
Net Cash From Operating  Activities (A)   1,13,600
     
Cash From Investing  Activities    
Purchase of Fixed Assets (80,000)  
Purchase of Investment (50,000) (1,30,000)
Net Cash From Investing Activities (B)   (1,30,000)
     
Cash From Financing Activities    
Proceeds from Issue of Share Capital 1,00,000  
Proposed  Dividend (10,000)  
Debenture Interest Paid (10,600)  
Redemption of 8% Debentures (90,000) (10,600)
     
Net Cash From Financing Activities (C)   (10,600)
Net Increase in Cash (A + B + C)   (27,000)
Add: Opening Cash and Cash Equivalents   (68,000)
(Cash + Marketable Investments- Bank Overdraft)    
Closing Cash and Cash Equivalents   (95,000)
(Cash + Marketable Investments- Bank Overdraft)    
     

Working Notes:-
Fixed Asset Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Balance b/d 5,50,000 Depreciation 80,000
Cash A/c (Balancing Figure) 80,000 Balance c/d 5,50,000
       
  6,30,000   6,30,000
       
           
Provision for Tax Account
Dr.   Cr.
Particulars Amount
(Rs)
Particulars Amount
(Rs)
Cash A/c (Balancing Figure) 18,000 Balance b/d 20,000
Balance c/d 25,000 Profit & Loss A/c 23,000
       
  43,000   43,000
       


Interest on Debentures @ 8%on Rs. 2,00,000 for 3 months=Rs 4,000on Rs 1,10,000 for 3 months=Rs 6,600=Rs 10,600

Note: Answer for Cash flow from Financing Activities calculated above is different from the answer given in the book.



Page No 3.115:

Answer:

Cash Flow Statement
For the Year Ending March 31, 2016
Particulars Details (Rs) Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   13,000
+ Provision for Tax    
+ General Reserve    
+ Interim Dividend    
  Add: Non Operating Expenses  
     
  Less: Non Operating Incomes  
     
Operating Profit Before Working Capital Changes   13,000
  Add: Decrease in Current Assets & Increase in Current Liabilities    
Debtors 5,000 5,000
  Less: Increase in Current Assets & Decrease in Current Liabilities    
Creditors (25,000)  
Inventories (10,000)  
Other Current Investments (10,000) (45,000)
Cash From Operating  Activities   (27,000)
  Less: Tax Paid  
Net Cash Used in Operating  Activities (A)   (27,000)
     
Cash From Investing  Activities    
Nil    
Net Cash From Investing Activities (B)   NIL
     
Cash From Financing Activities    
Proceeds from Issue of Share Capital 50,000 50,000
     
Net Cash From Financing Activities (C)   50,000
Net Increase in Cash (A + B + C)   23,000
  Add: Opening Cash and Cash Equivalents (30,000 + 10,000)   40,000
(Cash + Short-term Investments)    
Closing Cash and Cash Equivalents (47,000 + 16,000)   63,000
(Cash + Short-term Investments)    
     



Page No 3.116:

Answer:

Cash Flow Statement
For the Year Ending March 31, 2017
Particulars Details (Rs) Amount
(Rs)
Cash Flow from Operating Activities    
Net Profit   50,000
+ Provision for Tax   15,000
+ General Reserve  
+ Proposed Dividend   30,000
  Add: Non Operating Expenses    
Depreciation on Plant & Machinery 10,000 10,000
  Less: Non Operating Incomes  
     
Operating Profit Before Working Capital Changes   1,05,000
  Add: Decrease in Current Assets & Increase in Current Liabilities    
Creditors 44,000  
Bills Receivable 4,000 48,000
  Less: Increase in Current Assets & Decrease in Current Liabilities    
Debtors (36,000)  
Inventories (40,000) (76,000)
     
Cash From Operating  Activities   77,000
  Less: Tax Paid   (12,000)
Net Cash From Operating  Activities (A)   65,000
     
Cash From Investing  Activities    
Proceeds from sale of Plant & Machinery 50,000 50,000
Net Cash From Investing Activities (B)   50,000
     
Cash From Financing Activities    
Payment of  Land & Building (75,000)  
Proposed Dividend (20,000) (95,000)
     
Net Cash From Financing Activities (C)   (95,000)
Net Increase in Cash (A + B + C)   20,000
  Add: Opening Cash and Cash Equivalents   (32,000)
(Cash + Marketable Investments- Bank Overdraft)     
Closing Cash and Cash Equivalents   (12,000)
(Cash + Marketable Investments- Bank Overdraft)    
     

Working Note:-

Plant & Machinery Account
Dr.   Cr.
Particulars  Amount
(Rs)
Particulars Amount (Rs)
Balance b/d 1,50,000 Depreciation 10,000
    Bank A/c (Balancing Figure) 50,000
    Balance c/d 90,000
  1,50,000   1,50,000
       



Page No 3.117:

Answer:

 

Cash Flow Statement

for the year ended March 31, 2017

 

Particulars

Amount

(Rs)

Amount

(Rs)

A

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss

1,00,000

 

 

Provision for Tax

1,60,000

 

 

Profit Before Taxation

 

2,60,000

 

Items to be Added:

 

 

 

Depreciation

60,000

 

 

Goodwill written off

60,000

1,20,000

 

Operating Profit before Working Capital Adjustments

 

3,80,000

 

Less: Increase in Current Assets

 

 

 

 

      Bills Receivables

2,00,000

 

 

 

      Inventories

50,000

 

 

Add: Increase in Current Liabilities

 

 

 

       Trade Payables

40,000

(2,10,000)

 

Cash Generated from Operations

 

1,70,000

 

Less: Tax Paid

 

(1,40,000)

 

Net Cash Flows from Operating Activities

 

30,000