Chapter 5 from Textbook Analysis Of Financial Statements Ts Grewal 2019 for Class 12 ACCOUNTANCY

Question 30:

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


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

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

Answer:

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

Working Notes:

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

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

Question 31:

From the following particulars, calculate Cash Flow from Investing Activities


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

Additional Information:

1. Interest received on debentures held as investment â‚¹ 8,000.

2. Interest paid on debentures issued â‚¹ 20,000.

3. Dividend received on shares held as investment â‚¹ 20,000.

4. Dividend paid on Equity Share Capital â‚¹ 30,000.

5. A plot of land was purchased out of the surplus funds for investment purposes and was let out for commercial use. Rent received â‚¹ 50,000 during the year.

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.

Question 32:

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

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

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

Answer:

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

Working Notes:

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

Question 33:

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

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

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

Answer:

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

Question 34:

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

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

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 â‚¹ 1,00,000 were issued on 31st March, 2019.

Answer:

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

Question 35:

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

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

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

Answer:

Cash Flow Statement for the year ended March 31, 2019
	Particulars	Amount (â‚¹)	Amount (â‚¹)
	Cash Flow from Investing Activities
	Purchase of Machinery	(20,000)
	Sale of Machine	4,000
	*Net Cash from (used in) Investing Activities*		(16,000)

	Cash Flow from Financing Activities
	Proceeds from Issue of Equity Shares	5,000
	Repayment of Bank Loan	(10,000)
	*Net Cash from (used in) Financing Activities*		(5,000)

Working Notes:

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

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

Question 36:

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

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

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

Answer:

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

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

			12,62,500			12,62,500

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

			25,92,500			25,92,500

Question 37:

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

Particular

31^st March,

2019 (â‚¹)

31^st March,

2018 (â‚¹)

Equity Share Capital

12,00,000

10,00,000

12% Debentures

2,00,000

1,00,000

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

Answer:

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

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

Question 38:

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

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

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

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

Working Notes:

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

Calculation of Interest on Debentures

\begin{array}{l} 3, 75, 000 \times \frac{8}{100} = 30, 000 \\ 2, 75, 000 \times \frac{8}{100} \times \frac{6}{12} = 11, 000 \\ Total Interest = 41,000 (30,000+11,000) \end{array}

Calculation of Interest on Bank Loan

$\begin{array}{l} 1, 25, 000 \times \frac{8}{100} \times \frac{6}{12} = 5, 000 \\ 1, 00, 000 \times \frac{8}{100} \times \frac{6}{12} = 4, 000 \\ Total Interest = 9,000 (5,000+4,000) \end{array}$

Question 39:

From the following information, prepare Cash Flow Statement:

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

Answer:

Cash Flow Statement
	Particulars		Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (Net Profit)		20,000
	Profit Before Taxation		20,000
	Items to be Added:		–
	Operating Profit before Working Capital Adjustments		20,000
	Add: Decrease in Current Assets
	Stock		80,000
	Add: Increase in Current Liabilities
	Bills Payable		1,20,000
	Cash Generated from Operations		2,20,000
	Less: Tax Paid		–
	*Net Cash Flow from Operating Activities*			2,20,000

B	Cash Flow from Investing Activities
		Sale of Fixed Assets	3,00,000
	*Net Cash Flows from Investing Activities*			3,00,000

C	Cash Flow from Financing Activities
	Repayment of Long-Term Loan		(5,00,000)
	*Net Cash Used in Financing Activities*			(5,00,000)

D	Net Increase or Decrease in Cash and Cash Equivalents			20,000
		Add: Cash and Cash Equivalent in the beginning of the period		1,50,000
	Cash and Cash Equivalents at the end of the period			1,70,000

Question 40:

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

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

Answer:

Cash Flow Statement for the year ended March 31, 2019
	Particulars	Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (1,83,000 – 82,000)	1,01,000
	Profit Before Taxation	1,01,000
	Items to be Added:
	Interest on Debentures	7,500
	Operating Profit before Working Capital Adjustments	1,08,500
	Less: Increase in Current Assets
	Inventories	(56,000)
	Add: Increase in Current Liabilities
	Trade Payables	40,000
	Less: Decrease in Current Liabilities
	Other Current Liabilities	(8,000)
	Add: Decrease in Current Assets
	Trade Receivables	38,000
	Cash Generated from Operations	1,22,500
	Less: Tax Paid	–
	*Net Cash Flows from Operating Activities*		1,22,500

B	Cash Flow from Investing Activities
	Purchase of Fixed Assets	(1,57,000)
	Purchase of Investments	(13,000)
	*Net Cash Used in Investing Activities*		(1,70,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Equity Share Capital	50,000
	Proceeds from Issue of 15% Debentures	30,000
	Interest on Debentures (50,000 × 15%)	(7,500)
	*Net Cash Flow from Financing Activities*		72,500

D	Net Increase or Decrease in Cash and Cash Equivalents		25,000
	Add: Cash and Cash Equivalent in the beginning of the period		70,000
	Cash and Cash Equivalents at the end of the period		95,000

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

Question 41:

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

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

Notes to Accounts

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

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

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

Answer:

Cash Flow Statement for the year ended March 31, 2019
	Particulars		Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			9,000
	Items to be Added:
	General Reserve		10,000
	Goodwill		10,000
	Provision for Taxation		32,000
	Proposed Dividend		39,000	1,00,000
	Operating Profit before Working Capital Adjustments			1,00,000
	Less: Increase in Current Assets
		Trade Receivables	(33,000)
	Less: Decrease in Current Liabilities
	Other Current Liabilities		(2,000)
	Add:Decrease in Current Assets
	Inventories		18,000
	Add:Increase in CurrentLiabilities
	Trade Payables		18,000	1,000
	Cash Generated from Operations			1,01,000
	Less: Tax Paid			(28,000)
	*Net Cash Flows from Operating Activities*			73,000

B	Cash Flow from Investing Activities
	Purchase of Non-Current Investments			(25,000)
	Purchase of Plant & Machinery			(1,01,000)
	Sale of Land & Building			53,000
	*Net Cash Used in Investing Activities*			(73,000)

C	Cash Flow from Financing Activities
	Dividend Paid			(39,000)
	Proceeds from Issue of Share Capital			50,000
	*Net Cash Flow from Financing Activities*			11,000
D	Net Increase or Decrease in Cash and Cash Equivalents			11,000
	Add: Cash and Cash Equivalent in the beginning of the period			17,000
	Cash and Cash Equivalents at the end of the period			28,000

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

Question 42:

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

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

Notes to Accounts

Particulars	31st March, 2013 (â‚¹)	31st March, 2012 (â‚¹)
I. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss	4,00,000	3,00,000

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

Question 43:

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

Solar Power Ltd.

BALANCE SHEET

Particulars ulars	Note No.	31st March, 2014 (â‚¹)	31st March, 2013 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		24,00,000	22,00,000
(b) Reserves and Surplus	1	6,00,000	4,00,000
2. Non-Current Liabilities
Long-term Borrowings		4,80,000	3,40,000
3. Current Liabilities
(a) Trade Payables		3,58,000	4,08,000
(b) Short-term Provisions		1,00,000	1,54,000
Total Total Expenses		39,38,000	35,02,000
II. ASSETS
1. Non-Current Assets
Fixed Assets:
(i) Tangible Assets	2	21,40,000	17,00,000
(ii) Intangible Assets	3	80,000	2,24,000
2. Current Assets
(a) Current Investments		4,80,000	3,00,000
(b) Inventories		2,58,000	2,42,000
(c) Trade Receivables		3,40,000	2,86,000
(d) Cash and Cash Equivalents		6,40,000	7,50,000
Total		39,38,000	35,02,000

Notes to Accounts


Particulars ulars	31st March, 2014 (â‚¹)	31st March, 2013 (â‚¹)
1. Revenue and Surplus Surplus, i.e., Balance in Statement of Profit and Loss	6,00,000	4,00,000
2. Tangible Assets
Machinery	25,40,000	20,00,000
Less: Accumulated Deprciation	(4,00,000)	(3,00,000)
Total Expenses	21,40,000	17,00,000
3. Intangible Assets
Goodwill	80,000	2,24,000

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

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

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

Working Notes:

1.

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

			1,21,000				1,21,000

2. Interest on Loan

Interest on Loan taken on 1 st July, 2016 = ₹ (20, 000 \times \frac{10}{100} \times \frac{9}{12}) = ₹ 1, 500 Interest on Loan as on 31 st March, 2016 = ₹ (60, 000 \times \frac{10}{100}) = ₹ 6, 000 Total Interest Paid on Loan = ₹ (6, 000 + 1, 500) = ₹ 7, 500

Question 45:

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

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

Notes to Accounts

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

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

Answer:

Cash Flow Statement for the year ended March 31, 2019
	Particulars	Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (1,50,000 – 2,00,000)	(50,000)
	Transfer to General Reserve	3,40,000
	Dividend Paid	50,000
	Profit Before Taxation	3,40,000
	Items to be Added:
	Interest Paid	54,000
	Loss on Sale of Machinery	14,000
	Operating Profit before Working Capital Adjustments	4,08,000
	Less: Increase in Current Assets
	Inventories	(1,00,000)
	Trade Receivables	(1,00,000)
	Add: Increase in Current Liabilities
	Trade Payables	3,50,000
	Cash Generated from Operations	5,58,000
	Less: Tax Paid	–
	*Net Cash Flow from Operating Activities*		5,58,000

B	Cash Flow from Investing Activities
	Sale of Machinery	6,000
	Purchase of Fixed Assets	(5,20,000)
	*Net Cash Used in Investing Activities*		(5,14,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Equity Share Capital	5,00,000
	Proceeds from 7% Preference Share Capital	60,000
	Dividend Paid	(50,000)
	Redemption of 9% Debentures	(2,00,000)
	Interest Paid (6,00,000 × 9%)	(54,000)
	*Net Cash Flow from Financing Activities*		2,56,000

D	Net Increase in Cash and Cash Equivalents		3,00,000
	Add: Cash and Cash Equivalent in the beginning of the period		2,00,000
	Cash and Cash Equivalents at the end of the period		5,00,000

Working Notes:

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

Question 46:

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

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

Notes to Accounts

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

Additional Information:
1. 12% Debentures were redeemed on 31st March, 2015.
2. Tax â‚¹ 70,000 was paid during the year.
Prepare Cash Flow Statement.

Answer:

		Cash Flow Statement for the year ended 31^st March, 2015
	Particulars			Amount (â‚¹)	Amount (â‚¹)
I	Cash Flow from Operating Activities
	A. Net Profit before Tax and Extraordinary items*				2,50,000
	Adjustments for Non-cash and Non-operating items
	B. Add: Items to be Added
	Depreciation			99,000
	Intangible Assets Written off			10,000
	Interest on Debentures (12% of 5,00,000)			60,000
	Provision for Tax			50,000	2,19,000
	C. Less: Items to be Deducted

	D.Operating Profit before Working Capital Adjustments (A + B – C)				4,69,000
	E. Add: Decrease in Current Assets and Increase in Current Liabilities
	F. Less: Increase in Current Assets and Decrease in Current Liabilities
	Inventories			62,000	(62,000)
	Cash Generated from Operations (D + E – F)				4,07,000
	Less: Income Tax Paid (Net of Refund)			70,000	(70,000)
	*Net Cash Flows from (or used in) Operating Activities*				3,37,000

II	Cash Flow from Investing Activities
	Purchase of Fixed Assets (12,03,000 – 8,21,000)			(3,82,000)
	Purchase of Non-Current Investments			(25,000)
	*Net Cash Flows from (or used in) Investing Activities*				(4,07,000)

III	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital			1,00,000
	Redemption of Debentures			(50,000)
	Interest Paid on Debentures			(60,000)
	Increase in Bank Overdraft			1,00,000
	*Net Cash Flow from Financing Activities*				90,000

IV	Net Increase or Decrease in Cash and Cash Equivalents (I + II + III)				20,000
			Add: Cash and Cash Equivalent in the beginning of the period		1,20,000
			(Includes Current Investments of Rs 60,000)
	Cash and Cash Equivalents at the end of the period				1,40,000
	(Includes Current Investments of Rs 50,000)

Provision for Tax Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Bank A/c	70,000	Balance b/d	90,000
Balance c/d	70,000	Statement of Profit and Loss	50,000
	1,40,000		1,40,000

Question 47:

The Balance Sheet of Virendra Paper Ltd. as at 31st March, 2019 is given below:

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		7,20,000	6,00,000
(b) Reserves and Surplus:
Surplus i.e., Balance in Statement of Profit and Loss		4,80,000	3,75,000
2. Non-Current Liabilities
Long-term Borrowings:
10% Debentures		2,70,000	4,50,000
3. Current Liabilities
Trade Payables		1,20,000	90,000
Total		15,90,000	15,15,000
II. ASSETS
1. Non-Current Assets
Fixed Assets (Tangible)	1	7,50,000	7,20,000
2. Current Assets
(a) Inventories		3,60,000	4,20,000
(b) Trade Receivables		3,00,000	2,25,000
(c) Cash and Cash Equivalents		1,80,000	1,50,000
Total		15,90,000	15,15,000

Notes to Accounts

Particulars			31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
1. Fixed Assets (Tangible)
Land			2,40,000	3,00,000
	31^st March,	31^st March,
	2019 (â‚¹)	2018 (â‚¹)
Plant and Machinery	7,50,000	6,00,000
Less: Accumulated Depreciation	2,40,000	1,80,000
	5,10,000	4,20,000	5,10,000	4,20,000
			7,50,000	7,20,000

Additional Information:
1. Interim Dividend of â‚¹75,000 has been paid during the year.
2. Debenture Interest paid during the year â‚¹ 27,000.
You are required to prepare Cash Flow Statement.

Answer:

Cash Flow Statement for the year ended March 31, 2019
	Particulars	Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (4,80,000 – 3,75,000)	1,05,000
	Interim Dividend	75,000
	Profit Before Taxation	1,80,000
	Items to be Added:
	Interest Paid on Debentures	27,000
	Depreciation	60,000
	Operating Profit before Working Capital Adjustments	2,67,000
	Less: Increase in Current Assets
	Trade Receivables	(75,000)
	Add: Increase in Current Liabilities
	Trade Payables	30,000
	Add: Decrease in Current Assets
	Inventories	60,000
	Cash Generated from operations	2,82,000
	Less: Tax Paid	–
	*Net Cash Flow from Operating Activities*		2,82,000

B	Cash Flow from Investing Activities
	Sale of Land	60,000
	Purchase of Machinery	(1,50,000)
	*Net Cash Used in Investing Activities*		(90,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital	1,20,000
	Redemption of 10% Debentures	(1,80,000)
	Interim Dividend Paid	(75,000)
	Interest Paid on Debentures	(27,000)
	*Net Cash Used in Financing Activities*		(1,62,000)

D	Net Increase in Cash and Cash Equivalents		30,000
	Add: Cash and Cash Equivalent in the beginning of the period		1,50,000
	Cash and Cash Equivalents at the end of the period		1,80,000

Question 48:

Following are the Balance Sheets of Krishtec Ltd. for the years ended 31st March 2012 and 2011:

Particulars ulars	Note No.	31st March, 2012 (â‚¹)	31st March, 2011 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		12,00,000	8,00,000
(b) Reserves and Surplus (Surplus, i.e., Balance in Statement of Profit and Loss)		3,50,000	4,00,000
2. Non-Current Liabilities
Long-term Borrowings		4,40,000	3,50,000
3. Current Liabilities
(a) Trade Payables		60,000	50,000
Total Total Expenses		20,50,000	16,00,000
II. ASSETS
1, Non-Current Assets
Fixed Assets:
Tangible Assets		12,00,000	9,00,000
2. Current Assets
(a) Inventories		2,00,000	1,00,000
(b) Trade Receivables		3,10,000	2,30,000
(c) Cash and Cash Equivalents		3,40,000	3,70,000
Total		20,50,000	16,00,000

Prepare a Cash Flow Statement after taking into account the following adjustments:
(a) The company paid Interest â‚¹36,000 on its long-term borrowings.
(b) Depreciation charged on tangible fixed assets was â‚¹1,20,000

Answer:

Cash Flow Statement for the year ended March 31, 2012
	Particulars		Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			(50,000)
	Items to be Added:
	Depreciation		1,20,000
	Interest		36,000	1,56,000
	Operating Profit before Working Capital Adjustments			1,06,000
	Less: Increase in Current Assets
	Inventories		(1,00,000)
	Trade Receivables		(80,000)
	Add:Increase in CurrentLiabilities
	Trade Payables		10,000	(1,70,000)
	Cash Generated from Operations			(64,000)
	Less: Tax Paid			NIL
	*Net Cash Flows from Operating Activities*			(64,000)

B	Cash Flow from Investing Activities
		Purchase of Tangible Fixed Assets		(4,20,000)
	*Net Cash Used in Investing Activities*			(4,20,000)

C	Cash Flow from Financing Activities
	Interest Paid			(36,000)
	Proceeds from Issue of Share Capital			4,00,000
	Proceeds from Long Term Borrowings			90,000
	*Net Cash Flow from Financing Activities*			4,54,000
D	Net Increase or Decrease in Cash and Cash Equivalents			(30,000)
	Add: Cash and Cash Equivalent in the beginning of the period			3,70,000
	Cash and Cash Equivalents at the end of the period			3,40,000

Tangible Fixed Assets Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	9,00,000	Depreciation A/c	1,20,000
Bank A/c (Bal. Fig.)	4,20,000	Balance c/d	12,00,000
	13,20,000		13,20,000

Question 49:

From the following Balance Sheet of JY Ltd. as at 31st March 2017, prepare a Cash Flow Statement:

�

**BALANCE SHEET**
*as at 31st March, 2017*
Particular	Note No.	31st March, 2017 (₹)	31st March, 2016 (₹)
I. EQUITY AND LIABILITIES	�	�	�
1. Shareholders' Funds	�	�	�
(a) Share Capital	�	5,00,000	5,00,000
(b) Reserves and Surplus	1	1,00,000	(25,000)
2. Non-Current Liabilities	�	�	�
Long-term Borrowings	2	2,50,000	1,50,000
3. Current Liabilities	�	�	�
(a) Short-term Borrowings	3	1,50,000	1,10,000
(b) Short-term Provisions	4	1,25,000	75,000
Total	�	11,25,000	8,00,000
II. ASSETS	�	�	�
1. Non-Current Assets	�	�	�
Fixed Assets�Tangible	5	6,00,000	4,50,000
2. Current Assets	�	�	�
(a) Trade Receivables	�	2,75,000	2,25,000
(b) Cash and Cash Equivalents	�	50,000	25,000
(c) Short-term Loans and Advances	�	2,00,000	1,00,000
Total	�	11,25,000	8,00,000
�	�	�	�

�

Notes to Accounts

�

Particular		31^st March, 2017 (₹)	31^st March, 2016 (₹)
1.	Reserves and Surplus	�	�
�	Surplus, i.e., Balance in Statement of Profit and Loss	1,00,000	(25,000)
�	�	1,00,000	(25,000)
2.	Long-term Borrowings	�	�
�	10% Debentures	2,50,000	1,50,000
�	�	2,50,000	1,50,000
3.	Short-term Borrowings	�	�
�	Bank Overdraft	1,50,000	1,00,000
�	�	1,50,000	1,00,000
4.	Short-term Provisions	�	�
�	Provision for Tax	1,25,000	75,000
�	�	1,25,000	75,000
5.	Tangible Assets	�	�
�	Machinery	7,37,500	5,25,000
�	Accumulated Depreciation	(1,37,500)	(75,000)
�	�	6,00,000	4,50,000
�	�	�	�

�

Note: Proposed Dividend for the years ended 31st March, 2016 and 2017 are ₹ 50,000 and ₹ 75,000 respectively.

Additional Information: ₹ 1,00,000, 10% Debentures were issued on 31st March, 2017.

Answer:

Cash flow Statement
for the year ended 31^st March, 2017
Particulars	Amount (â‚¹)	Amount (â‚¹)
A. Cash Flow from Operating Activities
Closing Balance of Surplus i.e. Statement of Profit and Loss	1,00,000
Less: Opening Balance of Surplus i.e. Statement of Profit and Loss	(25,000)
	1,25,000
Add: Provision for Tax made	1,25,000
Proposed Dividend paid as on 31^st March, 2016	50,000
Net Profit before tax and extraordinary items	3,00,000
Add: Depreciation charged during the year	62,500
Interest paid on 10% debentures	15,000
Net Profit before Working Capital changes	3,77,500
Less: Increase in Trade Receivables	(50,000)
Net Profit before tax	3,27,500
Less: Tax Paid during the year	75,000
Cash flow from Operating Activities		2,52,500
B. Cash flow from Investing Activities
Purchase of Machinery	(2,12,500)
Short term loans and advances given	(1,00,000)
Cash used in Investing Activities		(3,12,500)
C. Cash flow from Financing activities
Proceeds from issue of 10% debentures	1,00,000
Increase in the Bank Overdraft	50,000
Interest paid on debentures	(15,000)
Proposed Dividend paid	(50,000)
Cash flow from financing activities		85,000
Net Increase in Cash and Cash Equivalents		25,000
Add: Cash and Cash Equivalents at the beginning of the year		25,000
Cash and Cash Equivalents at the end of the year		50,000

Note: Proposed Dividend Treatment is as per AS-4.

Question 50:

Prepare Cash Flow Statement from the following Balance Sheet:

Particulars ulars	Note No.	31st March, 2013 (â‚¹)	31st March, 2012 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		6,00,000	5,00,000
(b) Reserves and Surplus	1	4,00,000	2,00,000
2. Current Liabilities
(a) Trade Payables		2,80,000	1,80,000
Total Total Expenses		12,80,000	8,80,000
II. ASSETS
1, Non-Current Assets
(a) Fixed Assets:
Plant and Machinery		5,00,000	3,00,000
2. Current Assets
(a) Inventories		1,00,000	1,50,000
(b) Trade Receivables		6,00,000	4,00,000
(c) Cash and Cash Equivalents		80,000	30,000
Total		12,80,000	8,80,000

Notes to Accounts

Particulars	31st March, 2013 (â‚¹)	31st March, 2012 (â‚¹)
I. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss	4,00,000	2,00,000

Additional Information:
(i) An old machinery having book value of â‚¹50,000 was sold for â‚¹60,000.
(ii) Depreciation provided on Machinery during the year was â‚¹30,000.

Answer:

	Cash Flow Statement for the year ended March 31, 2013
	Particulars	Details (Rs)	Amount (Rs)
A	Cash from Operating Activities
	Net Profit		2,00,000
	Add: Non Operating Expenses
	Depreciation on Plant and Machinery	30,000
	Less: Non Operating Incomes
	Profit on Sale of Machinery	(10,000)	20,000
	Operating Profit Before Working Capital Changes		2,20,000
	Add: Increase in Current Liabilities
	Trade Payables	1,00,000
	Add: Decrease in Current Assets
	Inventories	50,000
	Less: Increase in Current Assets
	Trade Receivables	(2,00,000)	(50,000)
	Cash Generated from Operations		1,70,000
	Less: Tax Paid		-
	Net Cash Flow from Operating Activities		1,70,000

B	Cash From Investing Activities
	Sale of Plant and Machinery	60,000
	Purchase of Plant and Machinery	(2,80,000)
	Net Cash Used in Investing Activities		(2,20,000)

C	Cash From Financing Activities
	Issue of Share Capital	1,00,000
	Net Cash Flow from Financing Activities		1,00,000

D	Net Increase in Cash and Cash Equivalents		50,000
	Add: Cash and Cash Equivalents in beginning of the period		30,000
	Cash and Cash Equivalents at the end of the period		80,000

Working Notes:

Plant and Machinery Account
Dr.							Cr.
Date	Particulars	J.F.	Amount (Rs)	Date	Particulars	J.F.	Amount (Rs)
	Balance b/d		3,00,000		Depreciation		30,000
	P & L ( Profit)		10,000		Bank ( Sale)		60,000
	Purchases (bf)		2,80,000		Balance c/d		5,00,000

			5,90,000				5,90,000

Question 51:

Following is the summarised Balance Sheet of Philips India Ltd. as at 31st March 2018:

Particulars ulars	Note No.	31st March, 2018 (â‚¹)	31st March, 2017 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		13,50,000	13,50,000
(b) Reserves and Surplus	1	11,34,000	10,68,000
2. Non-Current Liabilities
Long-term Borrowings: 10% Mortgage Loan		8,10,000	...
3. Current Liabilities
(a) Trade Payables (Creditors)		4,20,000	5,04,000
(b) Short-term Provisions:
Provision for Tax		30,000	2,25,000
Total Total Expenses		37,26,000	31,47,000
II. ASSETS
1, Non-Current Assets
(a) Fixed Assets (Tangible)		9,60,000	12,00,000
(b) Non-Current Investments		1,80,000	1,50,000
2. Current Assets
(a) Current Investments		21,000	17,000
(b) Inventories		63,30,000	7,82,000
(c) Trade Receivables		13,65,000	6,30,000
(c) Cash and Cash Equivalents		5,70,00	4,30,000
Total		37,26,000	31,47,000

Notes to Accounts

Particulars	31st March, 2018 (â‚¹)	31st March, 2017 (â‚¹)
I. Reserves and Surplus
General Reserve	9,30,000	9,00,000
Surplus, i.e., Balance in Statement of Profit and Loss	2,04,000	1,68,000
	11,34,000	10,68,000

Additional Information:
1. Investments costing â‚¹ 24,000 were sold during the year for â‚¹ 25,5000.
2. Provistion for Tax made during the year was â‚¹ 27,000.
3. During the year, a part of the Fixed Assets costing â‚¹ 30,000 was sold for â‚¹ 36,000. The rofits were included in the Statement of Profit and Loss.
4. The Interim Dividend paid during the year amounted to â‚¹ 1,20,000.
You are required to prepare Cash Flow Statement.

Answer:

Cash Flow Statement for the year ended March 31, 2018
	Particulars	Amount (Rs)	Amount (Rs)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (2,04,000 – 1,68,000)	36,000
	Transfer to General Reserve	30,000
	Interim Dividend	1,20,000
	Provision for Taxation	27,000
	Profit Before Taxation	2,13,000
	Items to be Added:
	Depreciation	2,10,000
	Profit on Sale of Investments	(1,500)
	Profit on Sale of Fixed Assets	(6,000)
	Operating Profit before Working Capital Adjustments	4,15,500
	Less: Increase in Current Assets
	Trade Receivables	(7,35,000)
	Less: Decrease in Current Liabilities
	Trade Payables	(1,02,000)
	Add: Decrease in Current Assets
	Inventories	90,000
	Cash Generated from Operations	(3,31,500)
	Less: Tax Paid	(2,22,000)
	*Net Cash from (used in) Operating Activities*		(5,53,500)

B	Cash Flow from Investing Activities
	Sale of Investments	25,500
	Sale of Fixed Assets	36,000
	Purchase of Investments	(54,000)
	*Net Cash Flow from Investing Activities*		7,500

C	Cash Flow from Financing Activities
	Proceeds from Issue of 10% Mortgage Loan	8,10,000
	Interim Dividend Paid	(1,20,000)
	*Net Cash Flow from Financing Activities*		6,90,000

D	Net Increase in Cash and Cash Equivalents		1,44,000
	Add: Cash and Cash Equivalent in the beginning of the period		4,47,000
	Cash and Cash Equivalents at the end of the period		5,91,000

Working Notes:

WN1

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Balance b/d	12,00,000	Bank A/c (Sale)	36,000
Profit and Loss A/c (Profit on Sale)	6,000	Depreciation (Bal. Fig.)	2,10,000
		Balance c/d	9,60,000
	12,06,000		12,06,000

WN2

Investments Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Balance b/d	1,50,000	Bank A/c (Sale)	25,500
Profit and Loss A/c (Profit on Sale)	1,500	Balance c/d	1,80,000
Bank A/c (Purchases- Bal. Fig.)	54,000
	2,05,500		2,05,500

WN 3

Provision for Taxation Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Bank A/c (Tax Paid- Bal. Fig.)	2,22,000	Balance b/d	2,25,000
Balance c/d	30,000	Profit and Loss A/c	27,000
	2,52,000		2,52,000

Question 52:

From the following Balance Sheet, prepare Cash Flow Statement:

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		2,50,000	2,00,000
(b) Reserves and Surplus,	1	90,600	80,500
2. Current Liabilities
(a) Short-term Borrowings: Bank Loan		...	70,000
(b) Trade Payables		1,35,200	1,50,000
(c) Short-term Provisions: Provision for Tax		35,000	30,000
Total Total Expenses		5,10,800	5,30,500
II. ASSETS
1. Non-Current Assets
Fixed Assets:
(i) Tangible Assets	2	3,59,000	3,50,000
(ii) Intangible Assets: Goodwill		5,000	...
2. Current Assets
(a) Inventories		74,000	1,00,000
(b) Trade Receivables		64,200	80,000
(c) Cash and Cash Equivalents		8,600	500
Total		5,10,800	5,30,500

Notes to Accounts

Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. Reserves and Surplus
General Reserve	60,000	50,000
Surplus, i.e., Balance in Statement of Profit and Loss	30,600	30,500
	90,600	80,500
2. Tangible Assets
Land and Building	1,90,000	2,00,000
Plant and Machinery	1,69,000	1,50,000
	3,59,000	3,50,000

Additional Information:
1. Proposed Dividend for the year ended 31st March, 2019 was â‚¹ 25,000 and for the year ended 31st March, 2018 was â‚¹ 14,000.
2. Interim Dividend paid during the year was â‚¹ 9,000.
3. Income Tax paid during the year was â‚¹ 28,000.
4. Machinery was purchased during the year â‚¹ 33,000.
5. Depreciation to be charged on machinery â‚¹ 14,000 and building â‚¹ 10,000.

Answer:

Cash Flow Statement for the year ended March 31, 2019
	Particulars	Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (30,600 – 30,500)	100
	Proposed Dividend	23,000
	Transfer to General Reserve	10,000
	Provision for Taxation	33,000
	Profit Before Taxation	66,100
	Items to be Added:
	Depreciation on Machinery	14,000
	Depreciation on Building	10,000
	Operating Profit before Working Capital Adjustments	90,100
	Add: Decrease in Current Assets
	Inventories	26,000
	Trade Receivables	15,800
	Less: Decrease in Current Liabilities
	Trade Payables	(14,800)
	Cash Generated from operations	1,17,100
	Less: Tax Paid	(28,000)
	*Net Cash Flows from Operating Activities*		89,100

B	Cash Flow from Investing Activities
	Purchase of Machinery	(33,000)
	Purchase of Goodwill	(5,000)
	*Net Cash from (used in) Investing Activities*		(38,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Equity Shares	50,000
	Repayment of Bank Loan	(70,000)
	Dividend Paid	(23,000)
	*Net Cash Used in Financing Activities*		(43,000)

D	Net Increase in Cash and Cash Equivalents		8,100
	Add: Cash and Cash Equivalent in the beginning of the period		500
	Cash and Cash Equivalents at the end of the period		8,600

Working Notes:

WN1

Machinery Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	1,50,000	Depreciation	14,000
Bank A/c (Purchases- Bal. Fig.)	33,000	Balance c/d	1,69,000
	1,83,000		1,83,000

WN2

Provision for Taxation Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Bank A/c (Tax Paid)	28,000	Balance b/d	30,000
Balance c/d	35,000	Profit and Loss A/c (Bal. Fig.)	33,000
	63,000		63,000

Question 53:

From the following Balance Sheet of Akash Ltd. as at 31st March 2014:


Particulars	Note No.	31st March, 2014 (â‚¹)	31 March, 2013 (â‚¹)
I. EQUITY AND LIABILITES 1. Shareholders' Funds
(a) Share Capital		15,00,000	14,00,000
(b) Reserves and Surplus	1	2,50,000	1,10,000
2. Non-Current Liabilities
Long-term Borrowings		2,00,000	1,25,000
3. Current Liabilities
(a) Short-term Borrowings	2	12,000	10,000
(b) Trade Payables		15,000	83,000
(c) Short-term Provisions	3	18,000	11,000
Total		19,95,000	17,39,000
II. ASSETS
1. Non-Current Assets
Fixed Assets:
(i) Tangible Assets	4	18,60,000	16,10,000
(ii) Intangible Assets	5	50,000	30,000
2. Current Assets
(a) Current Investments		8,000	5,000
(b) Inventories		37,000	59,000
(c) Trade Receivables		26,000	23,000
(d) Cash and Cash Equivalents		14,000	12,000
Total		19,95,000	17,39,000

Notes to Accounts :
Particulars	31st March, 2014 (â‚¹)	31st March, 2013 (â‚¹)
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss	2,50,000	1,10,000
2. Short-term Borrowings :
Bank Overdraft	12,000	10,000
3. Short-term Provisions
Provision for Tax	18,000	11,000
4. Tangible Assets :
Machinery	20,00,000	17,00,000
Less: Accumulated Depreciation	(1,40,000)	(90,000)
	18,60,000	16,10,000
5. Intangible Assets
Patents	50,000	30,000

Additional Information :

(i) Tax paid during the year amounted to â‚¹ 16,000.
(ii) machine with a net book value of â‚¹ 10,000 (Accumulated Depreciation â‚¹ 40,000) was sold for â‚¹ 2,000.

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			1,40,000
	Provision for Tax			23,000
	Profit Before Taxation				1,63,000
	Items to be Added:
	Depreciation			90,000
	Loss on Sale of Fixed Assets			8,000	98,000
	Operating Profit before Working Capital Adjustments				2,61,000
	Less: Increase in Current Assets
			Trade Receivables	(3,000)
	Less: Decrease in Current Liabilities
	Trade Payables			(68,000)
	Add: Decrease in Current Assets
	Inventory			22,000	(49,000)
	Cash Generated from Operations				2,12,000
	Less: Tax Paid				(16,000)
	*Net Cash Flows from Operating Activities*				1,96,000

B	Cash Flow from Investing Activities
			Sale of Fixed Assets	2,000
			Purchase of Patents	(20,000)
			Purchase of Fixed Assets	(3,50,000)
	*Net Cash Used in Investing Activities*				(3,68,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital			1,00,000
	Proceeds from Long term Borrowings			75,000
	Raise of Bank Overdraft			2,000
	*Net Cash Flow from Financing Activities*				1,77,000

D	Net Increase in Cash and Cash Equivalents				5,000
	Add: Cash and Cash Equivalent in the beginning of the period (12,000+5,000)				17,000
	Cash and Cash Equivalents at the end of the period (14,000+8,000)				22,000

Working Notes:

WN1:

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Balance b/d	17,00,000	Bank A/c (Sale)	2,000
Bank A/c (Purchase- Bal. Fig.)	3,50,000	Accumulated Depreciation	40,000
		Profit and Loss A/c (Loss on Sale)	8,000
		Balance c/d	20,00,000
	20,50,000		20,50,000

WN2:

Accumulated Depreciation Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Fixed Assets A/c	40,000	Balance b/d	90,000
Balance c/d	1,40,000	Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)	90,000
	1,80,000		1,80,000

WN3:

Provision for Taxation Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Bank A/c (Tax Paid)	16,000	Balance b/d	11,000
Balance c/d	18,000	Profit and Loss A/c (Bal. Fig.)	23,000
	34,000		34,000

Question 54:

From the following Balance Sheet of SRS Ltd. and the additional information as on 31st March, 2016, prepare a Cash Flow Statement:

SRS Ltd.

BALANCE SHEET as on 31st March, 2016

Particulars ulars	Note No.	31st March, 2016 (â‚¹)	31st March, 2015 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		4,50,000	3,50,000
(b) Reserves and Surplus	1	1,25,000	50,000
2. Non-Current Liabilities
Long-term Borrowings	2	2,25,000	1,75,000
3. Current Liabilities
(a) Short-term Borrowingst	3	75,000	37,500
(b) Shrot-term Provisions	4	1,00,000	62,500
Total Total Expenses		9,75,000	6,75,000
II. ASSETS
1, Non-Current Assets
(a) Fixed Assets:
(i) Tangible	5	7,32,500	4,52,500
(ii) Intangible	6	50,000	75,000
(b) Non-current Investments		75,000	50,000
2. Current Assets
(a) Current Investments		20,000	35,000
(b) Inventories	7	61,000	36,000
(c) Cash and Cash Equivalents		36,500	26,500
Total		9,75,000	6,75,000

Notes to Accounts

Particular		31^st March 2016 (â‚¹)	31^st March 2015 (â‚¹)
1.	Reserves and Surplus
	Surplus, i.e., Balance in Statement of Profit and Loss	1,25,000	50,000
2.	Long-term Borrowings
	12% Debentures	2,25,000	1,75,000
3.	Short-term Borrowings
	Bank Overdraft	75,000	37,500
4.	Short-term Provisions
	Provision for Tax	1,00,000	62,500
5.	Tangible Assets
	Machinery	8,37,500	5,22,500
	Accumulated Depreciation	(1,05,000)	(70,000)
		7,32,500	4,52,500
6.	Intangible Assets
	Goodwill	50,000	75,000
7.	Inventories
	Stock-in-Trade	61,000	36,000

Additional Information:
(i) â‚¹50,000, 12% Debentures were issued on 31st March, 2016.
(ii) During the year, a piece of machinery costing â‚¹40,000, on which accumulated depreciation was â‚¹20,000, was sold at a loss of â‚¹5,000.

Answer:

Cash Flow Statement for the year ended March 31, 2016
	Particulars	Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss	75,000
	Provision for Tax	1,00,000	1,75,000
	Profit Before Taxation		1,75,000
	Items to be Added:
	Goodwill written off	25,000
	Debentures Interest	21,000
	Depreciation	55,000
	Loss on Sale of Machinery	5,000	1,06,000
	Operating Profit before Working Capital Adjustments		2,81,000
	Less: Increase in Current Assets
	Inventories	(25,000)	(25,000)
	Cash Generated from Operations		2,56,000
	Less: Tax Paid		(62,500)
	*Net Cash Flows from Operating Activities*		1,93,500

B	Cash Flow from Investing Activities
	Sale of machinery	15,000
	Purchase of machinery	(3,55,000)
	Purchase of non-current investment	(25,000)	(3,65,000)
	*Net Cash Used in Investing Activities*		(3,65,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital	1,00,000
	Increase in Bank Overdraft	37,500
	Interest on Debentures paid	(21,000)
	Proceeds from Issue of Debentures	50,000
	*Net Cash Flow from Financing Activities*		1,66,500
D	Net ↑/↓ in Cash and Cash Equivalents (A+B+C)		(5,000)
	Add: Cash and Cash Equivalent in the beginning of the period (26,500+35,000)		61,500
	Cash and Cash Equivalents at the end of the period (36,500+20,000)		56,500

Working Notes:

Machinery Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	5,22,500	Bank A/c (Sale)	15,000
Bank A/c (Purchase- Bal. Fig.)	3,55,000	Accumulated Depreciation A/c	20,000
		Profit and Loss A/c (Loss on Sale)	5,000
		Balance c/d	8,37,500
	8,77,500		8,77,500

Accumulated Depreciation Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Machinery A/c	20,000	Balance b/d	70,000
Balance c/d	1,05,000	Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)	55,000
	1,25,000		1,25,000

Question 55:

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

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		16,00,000	12,00,000
(b) Reserves and Surplus	1	6,60,000	4,40,000
2. Non-Current Liabilities
Long-term Borrowings (10% Debentures)		3,20,000	2,00,000
3. Current Liabilities
(a) Short-term Borrowing (Bank Loan)		80,000	1,10,000
(b) Trade Payables		1,50,000	1,80,000
Total Total Expenses		28,10,000	21,30,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets−Tangible	2	19,00,000	12,10,000
(b) Non-Current Investments		2,70,000	2,00,000
2. Current Assets
(a) Current Investments		1,60,000	80,000
(b) Trade Receivables		1,80,000	4,00,000
(c) Cash and Cash Equivalents	3	3,00,000	2,40,000
Total		28,10,000	21,30,000

Notes to Accounts :
Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
1. Reserves and Surplus :
Securities Premium Reserve	20,000	...
General Reserve	3,00,000	2,40,000
Surplus i.e., Balance in the Statement of Profit and Loss	3,40,000	2,00,000
	6,60,000	4,40,000
2. Fixed Assets−Tangible
Machinery (Cost)	21,40,000	14,00,000
Less: Accumulated Depreciation	2,40,000	1,90,000
	19,00,000	12,10,000

3. Cash and Cash Equivalents
Cash in Hand	1,40,000	1,10,000
Bank Balance	1,60,000	1,30,000
	3,00,000	2,40,000

Additional Information :
(i) During the year, Machinery costing â‚¹ 1,40,000 (accumulated depreciation provided thereon â‚¹ 1,10,000) was sold for â‚¹ 20,000.
(ii) During the year, Non-current Investments costing â‚¹ 80,000 were sold at a profit of â‚¹ 16,000.

Answer:

		Cash Flow Statement for the year ended March 31, 2019
	Particulars			Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			1,40,000
	General Reserve			60,000
	Profit Before Taxation				2,00,000
	Items to be Added:
	Depreciation			1,60,000
	Debentures Interest			20,000
	Loss on Sale of Fixed Assets			10,000
	Items to be Deducted:
	Profit on sale of Investment			(16,000)	1,74,000
	Operating Profit before Working Capital Adjustments				3,74,000
	Less: Decrease in Current Liabilities
	Trade Payables			(30,000)
	Add: Decrease in Current Assets
	Trade Receivables			2,20,000	1,90,000
	Cash Generated from Operations				5,64,000
	Less: Tax Paid				-
	*Net Cash Flows from Operating Activities*				5,64,000

B	Cash Flow from Investing Activities
			Sale of Fixed Assets	20,000
			Sale of Non-Current Investment	96,000
			Purchase of Non-Current Investment	(1,50,000)
			Purchase of Fixed Assets	(8,80,000)
	*Net Cash Used in Investing Activities*				(9,14,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital			4,00,000
	Proceeds from Issue of issue of Debentures			1,20,000
	Security Premium Reserve			20,000
	Repayment of Bank Loan			(30,000)
	Interest Paid			(20,000)
	*Net Cash Flow from Financing Activities*				4,90,000

D	Net Increase Decrease in Cash and Cash Equivalents				1,40,000
			Add: Cash and Cash Equivalent in the beginning of the period (1,10,000+1,30,000+80,000)		3,20,000
	Cash and Cash Equivalents at the end of the period (1,40,000+1,60,000+1,60,000)				4,60,000

Working Notes:

WN1:

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	14,00,000	Bank A/c (Sale)	20,000
Bank A/c (Purchase- Bal. Fig.)	8,80,000	Accumulated Depreciation	1,10,000
		Profit and Loss A/c (Loss on Sale)	10,000
		Balance c/d	21,40,000
	22,80,000		22,80,000

WN2:

Accumulated Depreciation Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Fixed Assets A/c	1,10,000	Balance b/d	1,90,000
Balance c/d	2,40,000	Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)	1,60,000
	3,50,000		3,50,000

WN3:

Non-Current Investment Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	2,00,000	Bank A/c (Sale) (80,000+16,000)	96,000
Profit and Loss A/c (Profit on Sale)	16,000	Balance c/d	2,70,000
Bank A/c (Purchase- Bal. Fig.)	1,50,000

	3,66,000		3,66,000

Question 56:

From the following Balance Sheet and information of Sun Ltd., prepare Cash Flow Statement:

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital	1	7,00,000	6,00,000
(b) Reserves and Surplus	2	4,10,000	2,00,000
2. Non-Current Liabilities
Long-term Borrowings: 10% Debentures		3,00,000	2,00,000
3. Current Liabilities
(a) Trade Payables		1,40,000	60,000
Total Total Expenses		15,50,000	10,60,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets−Tangible		7,00,000	6,00,000
(b) 10% Investments		2,00,000	1,00,000
2. Current Assets
(a) Current Investments		90,000	50,000
(b) Inventories		2,00,000	1,00,000
(c) Trade Receivables	3	2,80,000	1,90,000
(d) Cash and Cash Equivalents		80,000	20,000
Total		15,50,000	10,60,000

Notes to Accounts :
Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
1. Share Capital
Equity Share Capital	5,00,000	3,00,000
10% Preference Share Capital	2,00,000	3,00,000
	7,00,000	6,00,000
2. Reserves and Surplus
Securities Premium Reserve	10,000	...
Surplus i.e., Balance in Statement of Profit and Loss	4,00,000	2,00,000
	4,10,000	2,00,000
3. Trade Receivables
Sundry Debtors	3,00,000	2,00,000
Less: Provision for Doubtful Debts	20,000	10,000
	2,80,000	1,90,000

You are informed that during the year:

(i)	Proposed Dividend:	31st March, 2019	31st March, 2018
	Equity Share Capital	Nil	Nil
	Preference Share Capital	10%	10%

(ii) A machine with a book value of â‚¹ 90,000 was sold for â‚¹ 50,000;
(iii) Depreciation charged during the year â‚¹ 60,000;
(iv) Debentures were issued on 1st April, 2018;
(v) Investments were purchased on 31st March, 2019;
(vi) Preference shares were redeemed on 31st December,2018;
(vii) An interim dividend @ 15% was paid on equity shares on 31st December, 2018;
(viii) Fresh equity shares were issued at a premium of 5% on 31st March, 2019.

Answer:

		Cash Flow Statement for the year ended March 31, 2019
	Particulars			Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			2,00,000
	Preference Dividend $(3, 00, 000 \times \frac{10}{100})$ W.N.-1			30,000
	Profit Before Taxation				2,30,000
	Items to be Added:
	Depreciation on Fixed Assets			60,000
	Loss on Fixed Assets			40,000
	Interest on Debentures			30,000
	Dividend on Equity Shares			45,000
	Provision for Doubtful Debts			10,000
	Items to be Deducted:
	Interest on Investment			(10,000)	1,75,000
	Operating Profit before Working Capital Adjustments				4,05,000
	Less: Increase in Current Assets
			Trade Receivables	(1,00,000)
			Inventories	(1,00,000)	(2,00,000)
	Add: Increase in Current Liabilities
	Trade Payables			80,000	80,000
	Cash Generated from Operations				2,85,000
	Less: Tax Paid				-
	*Net Cash Flows from Operating Activities*				2,85,000

B	Cash Flow from Investing Activities
			Sale of Fixed Assets	50,000
			Purchase of Fixed Assets	(2,50,000)
			Purchase of Investment	(1,00,000)
			Interest on Investment	10,000
	*Net Cash Used in Investing Activities*				(2,90,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital			2,00,000
	Proceeds from Issue of Debentures			1,00,000
	Interest on Debentures Paid			(30,000)
	Redemption of Preference Share Capital			(1,00,000)
	Security Premium Reserve			10,000
	Dividend Paid on Preference Share Capital			(30,000)
	Dividend Paid on Equity Share Capital			(45,000)
	*Net Cash Flow from Financing Activities*				1,05,000

D	Net Increase in Cash and Cash Equivalents				1,00,000
			Add: Cash and Cash Equivalent in the beginning of the period (50,000+20,000)		70,000
	Cash and Cash Equivalents at the end of the period (90,000+80,000)				1,70,000

Working Notes:

(1) Dividend on 10% Preference Shares has been calculated on the value as on 31st March, 2018 as Rs. 1,00,000 Preference Shares were redeemed on 31st December, 2018.

(2)

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	6,00,000	Bank A/c (Sale)	50,000
Bank A/c (Purchase- Bal. Fig.)	2,50,000	Depreciation	60,000
		Profit and Loss A/c (Loss on Sale)	40,000
		Balance c/d	7,00,000
	8,50,000		8,50,000

Question 57:

From the following Balance Sheet and information of Volvo Ltd., prepare Cash Flow Statement:

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital	1	2,25,000	2,50,000
(b) Reserves and Surplus	2	1,27,500	50,000
2. Non-Current Liabilities
Long-term Borrowings: 10% Debentures		1,00,000	50,000
3. Current Liabilities
(a) Trade Payables		72,500	35,000
(b) Other Current Liabilities−Premium on Redemption of Preference Shares		2,500	5,000
Total Total Expenses		5,27,500	3,90,000
II. ASSETS
1, Non-Current Assets
(a) Fixed Assets−Tangible		3,10,000	2,55,000
(b) Non-Current Investments (10% Investments)		40,000	15,000
2. Current Assets
(a) Current Investments		5,000	4,000
(b) Inventories		45,000	50,000
(c) Trade Receivables	3	92,500	45,000
(d) Cash and Cash Equivalents	4	35,000	21,000
Total		5,27,500	3,90,000

Notes to Accounts

Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
1. Share Capital
Equity Share Capital	1,75,000	1,50,000
12% Preference Share Capital	50,000	1,00,000
	2,25,000	2,50,000
2. Reserves and Surplus
General Reserve	10,000	15,000
Surplus, i.e., Balance in Statement of Profit and Loss	1,17,500	35,000
	1,27,500	50,000
3. Trade Receivables
Sundry Debtors	1,00,000	50,000
Less: Provision for Doubtful Debts	7,500	5,000
	92,500	45,000
4. Cash and Cash Equivalents
Cash in Hand	12,500	6,000
Cash in Bank	22,500	15,000
	35,000	21,000

Additional Information :
(i) You are informed during the year:

Proposed Dividend	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
Equity Share Capital	NIL	NIL
Preference Share Capital	12%	12%

(ii) A machine with a book value of â‚¹20,000 was sold for â‚¹12,500;
(iii) Depreciation charged during the year was â‚¹35,000;
(iv) Preference shares were redeemed on 31st March, 2018 at a premium of 5%;
(v) An Interim dividend of â‚¹5,000 was paid on equity shares on 31st March, 2019 out of General Reserve;
(vi) Fresh equity shares were Issued on 31st March, 2019; and
(vii) Additional Investments were purchased on 31st March, 2019.

Answer:

		Cash Flow Statement for the year ended March 31, 2019
	Particulars			Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			82,500
	Preference Dividend			12,000

	Profit Before Taxation				94,500
	Items to be Added:
	Depreciation on Fixed Assets			35,000
	Loss on sale of Fixed Assets			7,500
	Interest on Debentures			5,000
	Provision for Doubtful Debts			2,500
					50,000
	Items to be Deducted:
	Interest on Investment				(1,500)

	Operating Profit before Working Capital Adjustments				1,43,000
	Less: Increase in Current Assets
			Trade Receivables	(50,000)
	Add: Decrease in Current Assets
	Inventory			5,000
	Add: Increase in Current Liabilities
	Trade Payables			37,500	(7,500)
	Cash Generated from Operations				1,35,500
	Less: Tax Paid				-
	*Net Cash Flows from Operating Activities*				1,35,500

B	Cash Flow from Investing Activities
			Sale of Fixed Assets	12,500
			Purchase of Fixed Assets	(1,10,000)
			Purchase of Investment	(25,000)
			Interest on Investment	1,500
	*Net Cash Used in Investing Activities*				(1,21,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital			25,000
	Proceeds from Issue of Debentures			50,000
	Interest on Debentures Paid			(5,000)
	Redemption of Preference Share Capital			(50,000)
	Premium on Redemption of Preference Share Capital			(2,500)
	Dividend Paid on Preference Share Capital			(12,000)
	Dividend Paid on Equity			(5,000)
	*Net Cash Flow from Financing Activities*				500

D	Net Increase in Cash and Cash Equivalents				15,000
			Add: Cash and Cash Equivalent in the beginning of the period (6,000+15,000+4,000)		25,000
	Cash and Cash Equivalents at the end of the period (12,500+22,500+5,000)				40,000

Working Notes:

(1) Interim dividend on equity shrares was paid out of General Reserve and not out of Surplus. Hence, the same has not been considered while calculating Net Profit before Tax and Extra-ordinary items.

(2)

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	2,55,000	Bank A/c (Sale)	12,500
Bank A/c (Purchase- Bal. Fig.)	1,10,000	Depreciation	35,000
		Profit and Loss A/c (Loss on Sale)	7,500
		Balance c/d	3,10,000
	3,65,000		3,65,000

Question 58:

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

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital	1	7,50,000	7,50,000
(b) Reserves and Surplus	2	3,10,000	(20,000)
2. Non-Current Liabilities
Long-term Borrowings (8% Debentures)		2,60,000	1,50,000
3. Current Liabilities
(a) Short-term Borrowings (8% Bank Loan)		40,000	50,000
(b) Trade Payables		1,20,000	1,10,000
(c) Short-term Provisions	3	50,000	40,000
Total Total Expenses		15,30,000	10,80,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(i) Tangible Assets (Net)		8,60,000	6,20,000
(ii) Intangible Assets (Goodwill)		15,000	40,000
(b) Non-Current Investments		1,25,000	80,000
2. Current Assets
(a) Current Investments		5,000	15,000
(b) Inventories		1,95,000	1,00,000
(c) Trade Receivables		2,00,000	2,00,000
(d) Cash and Cash Equivalents		1,30,000	25,000
Total		15,30,000	10,80,000

Notes to Accounts

Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
1. Share Capital
Equity Share Capital	5,50,000	4,50,000
12% Preference Share Capital	2,00,000	3,00,000
	7,50,000	7,50,000
2. Reserves and Surplus
Securities Premium Reserve	10,000	...
General Reserve	1,50,000	1,20,000
Surplus, i.e., Balance in Statement of Profit and Loss	1,50,000	(1,40,000)
	3,10,000	(20,000)
4. Short-term Provisions
Provision for Tax	50,000	40,000

Additional Information :
(i) During the year a piece of machinery costing â‚¹ 60,000 on which depreciation charged was â‚¹ 20,000 was sold at 50% of its book value. Depreciation provided on tangible Assets â‚¹ 60,000;
(ii) Income tax â‚¹ 45,000 was provided;
(iii) Additional Debentures were issued at par on 1st October, 2018 and Bank Loan was repaid on the same date;
(iv) At the end of the year Preference Shares were redeemed at a premium of 5%. 5.4pt; height: 16.2pt; text-align: center;" valign="top" width="281"> 2,00,000 2,00,000

(d) Cash and Cash Equivalents

1,30,000 25,000

Total

15,30,000 10,80,000

Notes to Accounts

Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
1. Share Capital
Equity Share Capital	5,50,000	4,50,000
12% Preference Share Capital	2,00,000	3,00,000
	7,50,000	7,50,000
2. Reserves and Surplus
Securities Premium Reserve	10,000	...
General Reserve	1,50,000	1,20,000
Surplus, i.e., Balance in Statement of Profit and Loss	1,50,000	(1,40,000)
	3,10,000	(20,000)
4. Short-term Provisions
Provision for Tax	50,000	40,000

Additional Information :
(i) During the year a piece of machinery costing â‚¹ 60,000 on which depreciation charged was â‚¹ 20,000 was sold at 50% of its book value. Depreciation provided on tangible Assets â‚¹ 60,000;
(ii) Income tax â‚¹ 45,000 was provided;
(iii) Additional Debentures were issued at par on 1st October, 2018 and Bank Loan was repaid on the same date;
(iv) At the end of the year Preference Shares were redeemed at a premium of 5%.

Answer:

		Cash Flow Statement for the year ended March 31, 2019
	Particulars			Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss [1,50,000 − (−1,40,000)]			2,90,000
	Provision for Tax			45,000
	General Reserve			30,000
	Profit Before Taxation				3,65,000
	Items to be Added:
	Depreciation on Fixed Assets			60,000
	Loss on Fixed Assets			20,000
	Interest on Debentures (6,000 + 10,400)			16,400
	Interest on Bank Loan (2,000 + 1,600)			3,600
	Premium on Redemption of Preference Shares			5,000
	Goodwill written off			25,000	1,30,000
	Operating Profit before Working Capital Adjustments				4,95,000
	Less: Increase in Current Assets
			Inventories	(95,000)
	Add: Increase in Current Liabilities
	Trade Payables			10,000	(85,000)
	Cash Generated from Operations				4,10,000
	Less: Tax Paid				(35,000)
	*Net Cash Flows from Operating Activities*				3,75,000

B	Cash Flow from Investing Activities
			Sale of Fixed Assets	20,000
			Purchase of Fixed Assets	(3,40,000)
			Purchase of Investment	(45,000)
	*Net Cash Used in Investing Activities*				(3,65,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital			1,00,000
	Proceeds from Issue of Debentures			1,10,000
	Interest on Debentures Paid			(16,400)
	Redemption of Preference Share Capital			(1,00,000)
	Premium on Redemption of Preference Share Capital			(5,000)
	Security Premium Reserve			10,000
	Repayment of Bank Loan			(10,000)
	Interest on Bank Loan Paid			(3,600)
	*Net Cash Flow from Financing Activities*				85,000
D	Net Increase in Cash and Cash Equivalents				95,000
			Add: Cash and Cash Equivalent in the beginning of the period (25,000+15,000)		40,000
	Cash and Cash Equivalents at the end of the period (1,30,000+5,000)				1,35,000

Working Notes:

WN1:

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	6,20,000	Bank A/c (Sale) (40,000 $\times$ 50%)	20,000
Bank A/c (Purchase- Bal. Fig.)	3,40,000	Depreciation	60,000
		Profit and Loss A/c (Loss on Sale)	20,000
		Balance c/d	8,60,000
	9,60,000		9,60,000

WN2:

Provision for Taxation Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Bank A/c (Tax Paid) (Bal. Fig.)	35,000	Balance b/d	40,000
Balance c/d	50,000	Profit and Loss A/c	45,000
	85,000		85,000

Question 59:

Prepare Cash Flow Statement from the following:

STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2019

Particulars ulars	Note No.	(â‚¹)
I. Revenue from Operations (Net Sales)		36,00,000
II. Expenses;
Purchases of Stock-in-Trade		28,16,000
Change in Inventories of Stock-in-Trade		(65,000)
Finance Costs		15,000
Depreciation and Amortisation Expenses		80,000
Other Expenses		5,34,000
Total		33,80,000
III. Profit before Tax (I − II)		2,20,000
IV. Less: Provision for Tax		40,000
V. Profit after Tax (III − IV)		1,80,000

BALANCE SHEET
as at 31st March, 2019

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		6,00,000	5,00,000
(b) Reserves and Surplus	1	3,00,000	1,20,000
2. Non-Current Liabilities
Long-term Loan		1,20,000	1,50,000
3. Current Liabilities
(a) Short-term Borrowings: Bank Overdraft		13,000	...
(b) Trade Payables (Creditors)		2,85,000	2,38,000
(c) Short-term Provision: Provision form Tax		44,000	30,000
Total Total Expenses		13,62,000	10,38,000
II. ASSETS
1. Non-Current Assets
Fixed Assets		6,20,000	4,00,000
2. Current Assets
(a) Short-term Investments (Marketable Security)		34,000	20,000
(b) Inventories		3,28,000	2,63,000
(c) Trade Receivables		3,48,000	3,10,000
(d) Cash and Cash Equivalents	2	32,000	45,000
Total		13,62,000	10,38,000

Notes to Accounts

Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss	3,00,000	1,20,000
2. Cash and Cash Equivalents
Cash in Hand	32,000	17,000
Cash at Bank	...	28,000
	32,000	45,000

Answer:

Cash Flow Statement for the year ended March 31, 2019
	Particulars	Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss	1,80,000
	Provision for Taxation	40,000
	Profit Before Taxation	2,20,000
	Items to be Added:
	Finance Cost	15,000
	Depreciation and Amortisation Expenses	80,000
	Operating Profit before Working Capital Adjustments	3,15,000
	Less: Increase in Current Assets
	Inventories	(65,000)
	Trade Receivables	(38,000)
	Add: Increase in Current Liabilities
	Trade Payables	47,000
	Cash Generated from Operations	2,59,000
	Less: Tax Paid	(26,000)
	*Net Cash Flow from Operating Activities*		2,33,000

B	Cash Flow from Investing Activities
	Purchase of Fixed Assets	(3,00,000)
	*Net Cash Used in Investing Activities*		(3,00,000)

C	Cash Flow from Financing Activities
	Proceeds from Issue of Share Capital	1,00,000
	Bank Overdraft	13,000
	Redemption of Long-Term Loan	(30,000)
	Interest (Finance Cost)	(15,000)
	*Net Cash Flow from Financing Activities*		68,000

D	Net Increase or Decrease in Cash and Cash Equivalents		1,000
	Add: Cash and Cash Equivalent in the beginning of the period (17,000 + 28,000 + 20,000)		65,000
	Cash and Cash Equivalents at the end of the period (32,000 + 34,000)		66,000

Working Notes:

WN1

Provision for Taxation Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Bank A/c (Tax Paid- Bal. Fig.)	26,000	Balance b/d	30,000
Balance c/d	44,000	Profit and Loss A/c	40,000
	70,000		70,000

WN2

Fixed Assets Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	4,00,000	Depreciation A/c	80,000
Bank A/c (Purchases- Bal. Fig.)	3,00,000	Balance c/d	6,20,000
	7,00,000		7,00,000

Note: Short-term Investments are considered as a part of Cash and Cash Equivalents

Question 60:

From the following Balance Sheet as at 31st March, 2019 and Statement of Profit and Loss for the year ended 31st March, 2019 of RSB Ltd. and additional information, prepare Cash Flow Statement:

Particulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		7,50,000	5,00,000
(b) Reserves and Surplus	1	9,50,000	3,00,000
2. Non-Current Liabilities
Long-term Borrowings (5% Debentures)		7,00,000	4,00,000
3. Current Liabilities
(a) Trade Payables		1,10,000	90,000
(b) Other Current Liabilities	2	39,000	25,000
(c) Short-term Provisions (Provision for Tax)		2,60,000	2,25,000
Total		28,09,000	15,40,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets – Tangible	3	6,85,000	7,45,000
(b) Non-current Investments		7,50,000	2,50,000
2. Current Assets
(a) Current Investments		6,74,000	95,000
(b) Inventories		1,00,000	2,00,000
(c) Trade Receivables		4,00,000	1,50,000
(d) Cash and Cash Equivalents		2,00,000	1,00,000
Total		28,09,000	15,40,000

**STATEMENT OF PROFIT AND LOSS**
*for the year ended 31st March, 2019*
Particulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. Revenue from Operations	4	40,00,000	35,00,000
II. Other Income	5	35,000	30,000
III. Total Revenue (I + II)		40,35,000	35,30,000
IV. Expenses:
Purchases of Stock-in-Trade		27,00,000	24,70,000
Change in Inventories of Stock-in-Trade	6	1,00,000	50,000
Finance Cost		27,500	20,000
Depreciation		40,000	45,000
Other Expenses		22,500	20,000
Total Expenses		28,90,000	26,05,000
V. Profit before Tax (III – IV)		11,45,000	9,25,000
VI. Less: Tax		3,45,000	2,25,000
VII. Profit after Tax (V – VI)		8,00,000	7,00,000

Notes to Accounts

Particular		31^st March 2019 (â‚¹)	31^st March 2018 (â‚¹)
1.	Reserves and Surplus
	Debenture Redemption Reserve	1,00,000	1,00,000
	Surplus, i.e., Balance in Statement of Profit and Loss	8,50,000	2,00,000
		9,50,000	3,00,000
2.	Other Current Liabilities
	Interest on Debentures	35,000	20,000
	Outstanding Expenses	4,000	5,000
		39,000	25,000
3.	Fixed Assets–Tangible
	Cost	8,90,000	9,90,000
	Less: Accumulated Depreciation	2,05,000	2,45,000
		6,85,000	7,45,000
4.	Revenue from Operations
	Sales	42,00,000	35,75,000
	Less: Sales Return	2,00,000	75,000
		40,00,000	35,00,000
5.	Other Income
	Interest on Deposits	15,000	12,500
	Dividend on Investments	10,000	17,500
	Gain (Profit) on Sale of Fixed Assets	10,000	…
		35,000	30,000
6.	Change in Inventories of Stock-in-Trade
	Opening Stock	2,00,000	2,50,000
	Less: Closing Stock	1,00,000	2,00,000
		1,00,000	50,000

Additional Information:

Additional debentures were issued on 1^st October, 2018 of â‚¹5,00,000. On the same date, part of outstanding debentures were redeemed and interest was paid, whereas interest on outstanding debentures was paid on 10^th April, 2019.
Board of Directors proposed dividend in both the years @ 10%.
Interim Dividend of â‚¹ 1,00,000 was paid during the year.
A fixed asset with original cost of 1,00,000, on which depreciation till date was provided of â‚¹ 80,000 was sold at a profit of â‚¹ 10,000.

Answer:

Cash flow Statement
for the year ended 31^st March, 2019
Particulars	Amount (â‚¹)	Amount (â‚¹)
A. Cash Flow from Operating Activities
Net Profit (as per Statement of Profit and Loss)	8,00,000
Add:Provision for Tax Made (WN3)	3,45,000
Net Profit before tax and extraordinary items	11,45,000
Add:Depreciation charged during the year (WN1)	40,000
Finance cost	27,500
Less:Interest on Deposits	15,000
Dividend received on Investments	10,000
Gain on sale of fixed asset	10,000
Net Profit before working capital changes	11,77,500
Add:Increase in Trade Payables	20,000
Decrease in Inventories	1,00,000
Less: Decrease in Outstanding expenses	1,000
Increase in Trade receivables	2,50,000
Net Profit before Tax		10,46,500
Less: Tax Paid		3,10,000
Cash flow from Operating Activities		7,36,500
B. Cash flow from Investing Activities
Sale of Fixed Asset	30,000
Purchase of Investments	(5,00,000)
Dividend received on Investments	10,000
Interest Received on deposits	15,000
Cash used in Investing Activities		(4,45,000)
C. Cash flow from Financing Activities
Proceeds from Issue of shares	2,50,000
Proceeds from Issue of debentures	5,00,000
Cash outflow on redemption of debentures (WN2)	(2,00,000)
Finance Cost paid (20,000 + 27,500 – 35,000)	(12,500)
Interim Dividend paid	(1,00,000)
Proposed Dividend Paid	(50,000)
Cash flow from Financing Activities		3,87,500
Net Increase in Cash and Cash Equivalents (A + B + C)		6,79,000
Add: Opening Balance of Cash	1,00,000
Opening Balance of Current Investments	95,000	1,95,000
Closing Balance of Cash and Cash Equivalents		8,74,000
Current Investments Closing Balance	6,74,000
Closing Balance of Cash	2,00,000
		8,74,000

Working Notes: 1.

Dr.	Accumulated Depreciation A/c						Cr.
Date		Particulars	Amount (â‚¹)	Date	Particulars	Amount (â‚¹)
2019				2018
March 31		To Fixed Asset A/c (Depreciation on Mach. Sold)	80,000	April 01	By Balance b/d	2,45,000
March 31		To balance c/d	2,05,000		By Statement of Profit & Loss A/c	40,000

			2,85,000			2,85,000

Dr.	Fixed Assets A/c						Cr.
Date		Particulars	Amount (â‚¹)	Date	Particulars	Amount (â‚¹)
2018				2019
April 01		To balance b/d	9,90,000	March 31	By Accumulated Depreciation A/c	80,000
2019				March 31	By Bank A/c- Sale of Machine (Bal. Fig.)	30,000

March 31		To Statement of Profit & Loss A/c- Profit	10,000	March 31	By balance c/d	8,90,000

			10,00,000			10,00,000

2.

Dr.	5% Debentures A/c						Cr.
Date		Particulars	Amount (â‚¹)	Date	Particulars	Amount (â‚¹)
2018				2018
October 01		To Bank A/c (Redemption) (Bal Fig.)	2,00,000	April 01	By balance b/d	4,00,000
2019				2018
March 31		To balance c/d	7,00,000	October 01	By Bank A/c (Issue)	5,00,000

			9,00,000			9,00,000

3.

Dr.	Provision for Tax A/c						Cr.
Date		Particulars	Amount (â‚¹)	Date	Particulars	Amount (â‚¹)
2019				2018
March 31		To Bank A/c- Tax Paid	3,10,000	April 01	By balance b/d	2,25,000
March 31		To balance c/d	2,60,000	2019
				March 31	By Statement of Profit & Loss A/c	3,45,000

			5,70,000			5,70,000

Question 1:

Identify the transactions as belonging to (i) Operating Activities, (ii) Investing Activities, (iii) Financing Activities and (iv) Cash and Cash Equivalents:

(a) Cash Sale of Goods	(b) Cash Received against Revenue from Services rendered
(c) Cash Purchase of Goods	(d) Cash Paid against Services Taken
(e) Patents Purchased	(f) Marketable Securities
(g) Bank Overdraft	(h) Proceeds from Issue of Debentures
(i) Purchase of Shares	(j) Repayment of Long-term Loan
(k) Commission Received	(l) Redemption of Debentures
(m) Interest on Debentures	(n) Interest on Investments
(o) Income Tax Paid	(p) Income Tax Paid on Gain of Sale of Asset
(q) Cash Received from Debtors	(r) Cash Paid to Creditors.

Answer:

OPERATING ACTIVITY	INVESTING ACTIVITY	FINANCING ACTIVITY	CASH AND CASH EQUIVALENTS
a. Cash Sale of Goods	e. Patents Purchased	g. Bank Overdraft	f. Marketable Securities
b. Cash Received against Revenue from Services rendered	i. Purchase of Shares	h. Proceeds from Issue of Debentures
c. Cash Purchase of Goods	n. Interest on Investments	j. Repayment of Long-term Loan
d. Cash paid against Services Taken	p. Income Tax paid on Gain on Sale of Asset	l. Redemption of Debentures
k. Commission Received		m. Interest on Debentures
o. Income Tax paid
q. Cash Received from Debtors
r. Cash Paid to Creditors

Question 2:

Classify the following transactions as Operating Activities for a financial company and a non-financial company:

(a) Purchase of Shares on a Stock Exchange.	(b) Dividend received on Shares.
(c) Dividend paid on Shares.	(d) Loans given.
(e) Loans taken.	(f) Interest paid on borrowings.

Answer:

OPERATING ACTIVITY
Financial Company	Non-Financial Company
a. Purchase of Shares on a Stock Exchange	-
b. Dividend received on shares
d. Loans given
e. Loans taken
f. Interest paid on borrowings

A financial company deals with securities like shares, bonds, debentures, etc on a regular basis. These securities form part of their stock and hence purchase and sale of these securities will be categorised under Operating Activity. But, Dividend paid by them will be the part of Financing Activities.
However, for a non-financial company issue of shares, debentures, etc form part of financing activities as such issue will increase the capital employed in the business.

Question 3:

State which of the following would result in inflow/outflow or no flow of Cash and Cash Equivalents:
(a) Sale of Fixed Assets, Book Value â‚¹ 1,00,000 at a profit of â‚¹10,000.
(b) Sale of goods against cash.
(c) Purchase of machinery for cash.
(d) Purchase of Land and Building for â‚¹10,00,000. Consideration paid by issue of debentures.
(e) Issued fully paid Bonus Shares.
(f) Cash withdrawn from bank.
(g) Payment of Interim Dividend.
(h) Proposed Dividend.

Answer:

Inflow	Outflow	No Flow
a. Sale of Fixed Assets	c. Purchase of Machinery for cash	d. Purchase of Land and Building. Consideration paid by issue of Debentures.
b. Sale of goods against cash	g. Payment of Interim Dividend	e. Issued fully paid bonus shares
		f. Cash withdrawn from Bank
		h. Proposed Dividend

Question 4:

For each of the following transactions, calculate the resulting Cash Flow and state the nature of Cash Flow, i.e., whether it is Operating, Investing or Financing:
(a) Acquired machinery for â‚¹2,50,000 paying 20% by cheque and executing a bond for the balance payable.
(b) Paid â‚¹2,50,000 to acquire shares in Informa Tech Ltd. and received a dividend of â‚¹50,000 after acquisition.
(c) Sold machinery of original cost of â‚¹2,00,000 with an accumulated depreciation of â‚¹1,60,000 for â‚¹60,000.

Answer:

(a) Investing Activity: 50,000
(b) Investing Activity: 2,00,000
(c) Investing Activity: 60,000

Question 5:

Following are the extracts from the Balance Sheet of MAH Ltd. as at 31st March, 2019:

Particular

31^st March

2019

(â‚¹)

31^st March

2018

(â‚¹)

Surplus, i.e., Balance in Statement of Profit and Loss

10,00,000

5,00,000

Dividend Payable

50,000

–

Additional Information: Proposed Dividend for the years ended 31st March, 2018 and 2019 are â‚¹ 4,00,000 and â‚¹ 5,00,000 respectively.
Prepare the Note to show Net Profit before Tax and Extraordinary Items.

Answer:

	Particulars	Amount (â‚¹)
	Profit as per Statement of Profit and Loss (10,00,000 – 5,00,000)	5,00,000
	Add: Proposed Dividend (Current Year)	4,00,000
	Profit Before Taxation and Extraordinary Items	9,00,000

Question 6:

Following is the extract from the Balance Sheet of Zee Ltd.:

Particular	31^st March 2019 (â‚¹)	31^st March 2018 (â‚¹)
Equity Share Capital	8,00,000	8,00,000
10% Preference Share Capital	6,00,000	6,00,000
Surplus i.e., Balance in Statement of Profit and Loss	7,20,000	4,00,000
Unpaid Dividend	20,000	–

Additional Information:
(i) Proposed dividend on equity shares for the year 2017-18 and 2018-19 are â‚¹ 1,60,000 and â‚¹ 2,00,000 respectively.
(ii) An Interim Dividend of â‚¹ 40,000 on Equity Shares was paid.
Calculate Net Profit before Tax and Extraordinary Items.

Answer:

	Particulars	Amount (â‚¹)
	Profit as per Statement of Profit and Loss (7,20,000 – 4,00,000)	3,20,000
	Add: Proposed Dividend (Current Year)	1,60,000
	Add: Proposed Preference Dividend (Current Year) 10% of 6,00,000	60,000
	Add: Interim Dividend	40,000
	Profit Before Taxation and Extraordinary Items	5,80,000

Question 7:

Calculate Net Profit before Tax and Extraordinary Items of Premier Sales Ltd. from its Balance Sheet as at 31st March, 2019:

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		5,00,000	5,00,000
(b) Reserves and Surplus (Surplus, i.e., Balance in Statement of Profit and Loss)		2,00,000	1,45,000
2. Current Liabilities
(a) Trade Payables		90,000	50,000
(b) Other Current Liabilities		20,000	10,000
(c) Short-term Provisions	1	50,000	30,000
Total Total Expenses		8,60,000	7,35,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets		4,50,000	4,00,000
(b) Non-Current Investments		50,000	1,50,000
2. Current Assets		2,60,000	1,85,000
Total		8,60,000	7,35,000

Notes to Accounts

Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. Short-term Provisions
Provision for Tax	50,000	30,000

Additional Information:

(i) Proposed Dividend for the years ended 31st March, 2018 and 2019 are â‚¹ 50,000 and â‚¹ 75,000 respectively.
(ii) Interim Dividend paid during the year was â‚¹ 10,000.

Answer:

	Particulars	Amount (â‚¹)
	Profit as per Statement of Profit and Loss (2,00,000 – 1,45,000)	55,000
	Add: Proposed Dividend (Current Year)	50,000
	Add: Provision for Taxation (Current Year)	50,000
	Add: Interim Dividend Paid	10,000
	Profit Before Taxation and Extraordinary Items	1,65,000

Question 8:

From the following information, calculate Net Profit before Tax and Extraordinary Items:

	â‚¹
Surplus, i.e., Balance in Statement of Profit and Loss (Opening)	1,00,000
Surplus, i.e., Balance in Statement of Profit and Loss (Closing)	3,36,000
Dividend paid in the current year	72,000
Interim Dividend Paid during the year	90,000
Transfer to Reserve	1,00,000
Provision for Tax for the current year	1,50,000
Refund of Tax	3,000
Loss due to Earthquake	2,00,000
Insurance Proceeds from Earthquake disaster settlement	1,00,000

Answer:

Cash Flow Statement for the year ended…
	Particulars	Amount (Rs)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss (3,36,000 − 1,00,000)	2,36,000
	Add: Transfer to Reserve	1,00,000
	Proposed Dividend	72,000
	Interim Dividend	90,000
	Provision for Tax	1,50,000
	Extraordinary Items (Loss due to Earthquake)	2,00,000
	Less: Extraordinary Items (Insurance Proceeds from Earthquake disaster settlement )	(1,00,000)
	Refund of Tax	(3,000)
	Net Profit before Tax and Extraordinary Items	7,45,000

Question 9:

From the following information, calculate Operating Profit before Working Capital Changes:

	â‚¹
Net Profit before Tax and Extraordinary Items	4,47,000
Depreciation on Machinery	84,000
Interest on Borrowings	16,800
Goodwill Amortised	18,600
Loss on Sale of Furniture	18,000
Premium on Redemption of Preference Shares	6,000
Gain (Profit) on Sale of Investments	12,000
Interest and Dividend Received on Investments	27,600

Answer:

		Cash Flow Statement for the year ended March 31, ….
	Particulars		Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Net Profit Before Taxation and Extraordinary Items			4,47,000
	Items to be Added:
	Depreciation on Machinery		84,000
	Loss on Sale of Furniture		18,000
	Interest on Borrowings		16,800
	Goodwill Amortized		18,600
				1,37,400
	Items to be Deducted:
	Profit on Sale of Investment		(12,000)
	Interest and Dividend Received on Investment		(27,600)	(39,600)
	Operating Profit before Working Capital Adjustments			5,44,800

Note: Assuming Premium on Redemption of Preference Shares has been paid out of the Securities Premium Reserve Balance.

Question 10:

From the following Balance Sheet of Double Tree Ltd. as at 31st March, 2019 and additional information, calculate Operating Profit before Working Capital Changes:

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		5,00,000	5,00,000
(b) Reserves and Surplus	1	6,70,000	5,00,000
2. Current Liabilities
(a) Trade Payables		60,000	50,000
(b) Other Current Liabilities (Outstanding Expenses)		20,000	15,000
(c) Short-term Provisions (Provision for Tax)		1,00,000	90,000
Total Total Expenses		13,50,000	11,55,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets (Tangible)		7,50,000	7,30,000
(b) Non-Current Investments		2,50,000	3,00,000
2. Current Assets		3,50,000	1,25,000
Total		13,50,000	11,55,000

Notes to Accounts

Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. Reserve and Surplus
General Reserve	5,00,000	4,00,000
Surplus, i.e., Balance in Statement of Profit and Loss	1,70,000	1,00,000
	6,70,000	5,00,000

Additional Information: Depreciation for the year was â‚¹75,000.

Answer:

Computation of Operating Profit before Working Capital Changes for the year ended March 31, 2019
	Particulars		Amount (â‚¹)	Amount (â‚¹)
	Profit as per Statement of Profit and Loss (1,70,000 – 1,00,000)			70,000
	Transfer to General Reserve (5,00,000 – 4,00,000)			1,00,000
	Provision for Taxation (Current Year)			1,00,000
	Profit before Tax			2,70,000
	Items to be Added:
		Depreciation for the year		75,000
	*Operating Profit before Working Capital Changes*			3,45,000

Question 11:

Calculate Cash Flow from Operating Activities from the following details:

Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
Surplus, i.e., Balance in Statement of Profit and Loss	80,000	60,000
Trade Receivables	25,000	31,000
Provision for Depreciation	40,000	30,000
Inventories	80,000	60,000
Outstanding Rent	12,000	21,000
Goodwill	30,000	38,000
Prepaid Insurance	1,000	2,000
Trade Payables (Creditors)	13,000	19,000

Answer:

Particulars		Amount (â‚¹)	Amount (â‚¹)
Profit as per Statement of Profit and Loss (Net Income)			20,000
Items to be Added:
	Depreciation	10,000
	Goodwill written off	8,000	18,000
Operating Profit before Working Capital Changes			38,000
Add: Decrease in Current Assets
	Trade Receivables	6,000
	Prepaid Insurance	1,000
Less: Increase in Current Assets
	Inventories	(20,000)
Less: Decrease in Current Liabilities
	Outstanding Rent	(9,000)
	Trade Payables	(6,000)	(28,000)
Cash Generated from operations			10,000
Less: Tax Paid			Nil
*Net Cash Flows from Operating Activities*			10,000

Question 12:

Compute Cash Flow from Operating Activities from the following information:


Particulars	â‚¹
Net Profit after Provision for Tax and Payment of Dividend	2,15,000
Provision for Tax	45,000
Final Dividend paid during the year	50,000
Depreciation	25,000
Loss on Sale of Machinery	10,000
Patents Amortised	30,000
Gain on Sale of Land	70,000
Income Tax Refund	30,000

Answer:

Cash Flow from Operating Activities
	Particulars	Amount (Rs)	Amount (Rs)
	Net Profit after Provision for Tax and Proposed Dividend		2,15,000
	Add: Provision for Tax		45,000
	Add: Proposed Dividend		50,000
	Profit Before Taxation		3,10,000
	Items to be Added:
	Depreciation	25,000
	Loss on Sale of Machinery	10,000
	Patents Amortised	30,000	65,000
			3,75,000
	Items to be Deducted:
	Income Tax Refund	(30,000)
	Gain on Sale of Land	(70,000)	(1,00,000)
	Operating Profit before Working Capital Changes		2,75,000
	Less: Net Tax Paid (45,000 – 30,000)		(15,000)
	*Net Cash Flows from Operating Activities*		2,60,000

Question 13:

Calculate Cash Flow from Operating Activities from the following:

(i) Profit form the year is â‚¹ 7,00,000 after considering the following items:


Particulars	(â‚¹)
Depreciation on Fixed Assets	40,000
Goodwill Amortised	20,000
Gain on Sale of Land	90,000
Appropriation of Profit towards General Reserve	60,000

(ii) Following is the position of Current Assets and Current Liabiliites


Particulars	Closing Balance (â‚¹)	Opening Balance (â‚¹)
Trade Payables	50,000	75,000
Trade Receivables	75,000	60,000
Prepaid Expenses	10,000	18,000

Answer:

Cash Flow from Operating Activities
	Particulars	Amount (Rs)	Amount (Rs.)
	Profit as per Statement of Profit and Loss		7,00,000
	Add: Transfer to General Reserve		60,000
	Profit Before Tax and Extraordinary items		7,60,000
	Items to be Added:
	Depreciation on Fixed Asset	40,000
	Goodwill Amortised	20,000	60,000
			8,20,000
	Items to be Deducted:
	Gain on Sale of land	(90,000)	(90,000)
	Operating Profit before Working Capital Adjustments		7,30,000
	Add:Decrease in Prepaid Expenses	8,000	8,000
			7,38,000
	Less: Decrease in Trade Payables	(25,000)
	Less: Increase in Trade Receivables	(15,000)	(40,000)

	*Net Cash Flows from Operating Activities*		6,98,000

Question 14:

Grand Hospitality Ltd., reported Net Profit after Tax of â‚¹ 6,40,000 for the year ended 31st March, 2019. The relevant extract from Balance Sheet as at 31st March, 2019 is:


Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
Inventories	1,15,000	1,25,000
Trade Receivables	1,50,000	1,10,000
Prepaid Expenses	20,000	6,000
Trade Payables	1,10,000	80,000
Provision for Tax	20,000	15,000

Depreciation charged on Plant and Machinery â‚¹ 55,000, insurance claim received â‚¹ 50,000, gain (profit) on sale of investment â‚¹ 20,000 appeared in the Statement of Profit and Loss for the year ended 31st March, 2019. Calculate Cash Flow from Operating Activities.

Answer:

Cash Flow from Operating Activities
	Particulars		Amount (â‚¹)	Amount (â‚¹)
	Profit as per Statement of Profit and Loss			6,40,000
	Add: Provision for Tax			20,000
	Less:Extraordinary Item
	Insurance Claim			(50,000)
	Profit Before Tax and Extraordinary items			6,10,000
	Items to be Added:
	Depreciation on Plant and Machinery			55,000
				6,65,000
	Items to be Deducted:
	Gain on Sale of Investments			(20,000)
	Operating Profit before Working Capital Adjustments			6,45,000
	Add: Increase in Current Liabilities
		Trade Payables	30,000
	Add:Decrease in Current Assets
		Inventories	10,000	40,000
	Less: Increase in Current Assets			6,85,000
		Trade Receivables	(40,000)
		Prepaid Expenses	(14,000)	(54,000)
	Cash Generated from Operations (before tax and Extraordinary items)			6,31,000
	Less: Tax Paid			(15,000)
	Cash Flow from Operating Activities after Tax			6,16,000
	Add:Extraordinary items
	Insurance Claim			50,000
	*Net Cash Flows from Operating Activities*			6,66,000

Question 15:

Calculate Cash Flow from Operating Activities from the following information.

Particular	31^st March 2017 (Rs)
Net Profit (Difference between Closing and Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss)	8,00,000
Final Dividend paid in the year	1,10,000
Compensation for Natural Disaster credited to Statement of Profit and Loss	75,000
Depreciation	1,50,000
Loss on Sale of Investment	30,000
Gain (Profit) on Sale of Land	90,000
Provision for Tax	1,10,000
Dividend Received	20,000
Decrease in Current Assets (Other than Cash and Cash Equivalents)	40,000
Increase in Current Liablilities	70,000
Decrease in Current Liabilities	10,000
Increase in Current Assets (Other than Cash and Cash Equivalents)	60,000
Income Tax Refund	10,000
Income Tax Paid	1,20,000

Answer:

Cash Flow from Operating Activities
	Particulars	Amount (Rs)	Amount (Rs)
	Profit as per Statement of Profit and Loss		8,00,000
	Add: Provision for Tax		1,10,000
	Add: Proposed Dividend Less: Income Tax Refund Less: Compensation for Natural Disaster		1,10,000 (10,000) (75,000)

	Profit Before Tax and Extraordinary items		9,35,000
	Items to be Added:
	Depreciation on Plant and Machinery	1,50,000
	Loss on sale of Investment	30,000	1,80,000
			11,15,000
	Items to be Deducted:
	Profit on Sale of Land	(90,000)
	Dividend Received	(20,000)	(1,10,000)
	Operating Profit before Working Capital Adjustments		10,05,000
	Add: Increase in Current Liabilities	70,000
	Add:Decrease in Current Assets	40,000	1,10,000
			11,15,000
	Less: Decrease in Current Liabilities	(10,000)
	Less: Increase in Current Assets	(60,000)	(70,000)
	Cash Generated from Operations		10,45,000
	Less: Tax Paid		(1,20,000)
	Cash Flow from operations after Tax		9,25,000
	Add: Compensation for Natural Disaster Add: Income Tax Refund		75,000 10,000
	*Net Cash Flows from Operating Activities*		10,10,000

Question 16:

Following information is related to ABC Ltd.:

STATEMMENT OF PROFIT AND LOSS
*for the year ended 31st March, 2019*
Particulars ulars	Note No.	(â‚¹)
I. Revenue from Operations (Net Sales)		30,00,000
II. Other Income	1	45,000
III. Total Revenue (I + II)		30,45,000
IV. Expenses;
(a) Purchases of Stock-in-Trade		23,03,000
(b) Change in Inventories of Stock-in-Trade	2	(16,000)
(c) Depreciation and Amortisation Expenses		1,85,000
(d) Other Expenses	3	3,29,000
Total Expenses		28,01,000
V. Profit before Tax (III − IV)		2,44,000
VI. Less: Provision for Tax		64,000
VII. Profit after Tax (V – VI)		1,80,000

Notes to Accounts

Particulars	â‚¹
1. Other Income
(a) Dividend Received	5,000
(b) Gain (Profit) on Sale of Plant	40,000
	45,000
2. Change in Inventories of Stock-in-Trade
Opening Inventories	2,84,000
Less: Closing Inventories	3,00,000
	(16,000)
3. Other Expenses
(a) Office Expenses	58,000
(b) Selling Expenses	2,35,000
(c) Loss on Sale of Assets	36,000
	3,29,000

Other Information:	Balance as on 31st March, 2019 (â‚¹)	Balance as on 31st March, 2018 (â‚¹)
Trade Payables	2,78,000	2,50,000
Trade Receivables	4,52,000	4,15,000
Inventories	3,00,000	2,84,000
Office Expenses Outstanding	...	5,000
Selling Expenses Outstanding	25,000	22,000

Calculate Cash Flow from Operating Activities.

Answer:

Cash Flow from Operating Activities
	Particulars	Amount (â‚¹)	Amount (â‚¹)
	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)	(53,000)
	Cash Generated from Operations		3,93,000
	Less: Tax Paid		(64,000)
	*Net Cash Flows from Operating Activities*		3,29,000

Question 17:

Compute Cash Flow from Operating Activities from the following:


Particulars	Closing Balances (â‚¹)	Opening Balances (â‚¹)
Surplus, i.e., Balance in Statement of Profit and Loss	65,000	60,000
Trade Receivables:
Debtors	67,000	1,02,000
Bills Receivable	1,03,000	62,000
General Reserve	2,37,000	2,02,000
Provision for Depreciation	30,000	20,000
Outstanding Expenses	12,000	30,000
Goodwill	70,000	80,000

An asset costing â‚¹ 40,000 having book value of â‚¹ 28,000 was sold for â‚¹ 36,000.

Answer:

Cash Flow from Operating Activities
	Particulars		Amount (Rs)	Amount (Rs)
	Profit as per Statement of Profit or Loss		5,000
	Add: Transfer to Reserve		35,000	40,000
	Profit before Tax and Extraordinary Items			40,000
	Items to be Added:
	Depreciation(WN1)		22,000
	Goodwill written off		10,000	32,000
	Items to be Deducted:
	Profit on Sale of Asset			(8,000)
	Operating Profit before Working Capital Adjustments			64,000
	Less: Increase in Current Assets
		Bills Receivables		(41,000)
	Add:Decrease in Current Assets
		Debtors		35,000
	Less: Decrease in Current Liabilities
		Outstanding Expenses		(18,000)
	Cash Generated from Operations			40,000
	Less: Tax Paid			Nil
	*Net Cash Flows from Operating Activities*			40,000

Working Note1:

Provision for Depreciation Account
Dr.		Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Asset A/c (40,000 – 28,000)*	12,000	Balance b/d	20,000
Balance c/d	30,000	Profit and Loss A/c (Depreciation charged during the year)	22,000
	42,000		42,000

Particulars	Amount (Rs)
Cost of Asset Sold	40,000
Less: Provision for Depreciation*	(12,000)
Book Value	28,000
Less: Sale of Asset	(36,000)
Profit on Sale	8,000

Question 18:

Charles Ltd. earned a profit of â‚¹ 1,00,000 after charging depreciation of 20,000 on assets and a transfer to General Reserve of â‚¹ 30,000. Goodwill amortised was â‚¹ 7,000, and gain on sale of machinery was â‚¹ 3,000. Other information available is (changes in the value of Current Assets and Current Liabilities): trade receivables showed an increase of â‚¹ 3,000; trade payables an increase of â‚¹ 6,000; Prepaid expenses an increase of â‚¹ 200; and outstanding expenses a decrease of â‚¹ 2,000.
Ascertain Cash Flow from Operating Activities.

Answer:

Cash Flow Statement
	Particulars		Amount (â‚¹)	Amount (â‚¹)
	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			1,00,000
	Items to be Added:
	Depreciation		20,000
	Goodwill amortised		7,000
	Transfer to General Reserve		30,000
	Items to be Deducted:
	Gain on sale of machinery		(3,000)	54,000
	Operating Profit before Working Capital Adjustments			1,54,000
	Less: Increase in Current Assets
		Prepaid Expenses	(200)
		Trade Receivables	(3,000)
	Less: Decrease in Current Liabilities
	Outstanding Expenses		(2,000)
	Add:Increase in Current Liabilities
	Trade Payables		6,000	800
	Cash Generated from Operations			1,54,800

Question 19:

Compute Cash Flow from Operating Activities from the following:
(i) Profit for the year ended 31st March, 2019 is â‚¹ 10,000 after providing for depreciation of â‚¹ 2,000.
(ii) Current Assets and Current Liabilities of the business for the year ended 31st March, 2018 and 2019 are as follows:

Particular	31^st March 2018 (â‚¹)	31^st March 2019 (â‚¹)
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
Other Current Assets	10,000	12,000
Expenses Payables	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
	Particulars	Amount (â‚¹)	Amount (â‚¹)
	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss		10,000
	Items to be Added:
	Depreciation	2,000	2,000
	Operating Profit before Working Capital Adjustments		12,000
	Less: Increase in Current Assets
	Accrued Income	(1,000)
	Inventories	(3,000)
	Other Current Assets	(2,000)
	Trade Receivables	(1,000)
	Less: Decrease in Current Liabilities
	Income Received in Advance	(1,000)
	Add: Increase in Current Liabilities
	Expenses Payable	500
	Provision for Doubtful Debts	200
	Trade Payables	2,000
	Add: Decrease in Current Assets
	Prepaid Expenses	1,000	(4,300)
	Cash Generated from Operations		7,700

Question 20:

Calculate Cash Flow from Operating Activities from the following information:

**INCOME STATEMENT (STATEMENT OF PROFIT AND LOSS)**
*for the year ended 31st March, 2019*
Particulars	Note No.	(â‚¹)
I. Revenue from Operations (Sales)		5,98,000
II. Other Income	1	19,500
III. Total Revnue (I + II)		6,17,500
IV. Expenses;
Cost of Materials Consumed		4,00,000
Change in Inventories of Finished Goods and Work-in-Progress	2	15,000
Employee Benefit Expenses		1,05,000
Depreciation and Amortisation Expenses		15,000
Other Expenses	3	20,000
Total Expenses		5,55,000
V. Profit before Tax (III − IV)		62,500
VI. Tax @ 30%		18,750
VII. Profit after Tax (V − VI)		43,750

Notes to Accounts

Particulars	â‚¹
1. Other Income
Rent	15,000
Gain (Profit) on Sale of Machinery	2,500
Interest on Debentures held as Investments	2,000
	19,500
Changes in Inventories of Finished Goods and Work-in-Progress
(a) Finished Goods
Opening Inventories	37,500
Less: Closing Inventories	25,000
Sub-Total	12,500
(b) Work-in-Progress
Opening Inventories	22,500
Less: Closing Inventories	20,000
Sub-Total	2,500
Total (a + b)	15,000
2. Other Expenses
Office Expenses	12,500
Selling Expenses	6,000
Loss on Sale of Furniture	1,500
	20,000

Current Assets and Current Liabilities	As on 31st March, 2019 (â‚¹)	As on 1st April, 2018 (â‚¹)
Trade Receivables	25,000	20,000
Trade Payables	32,500	35,000
Outstanding Expenses	8,000	5,000
Prepaid Expenses	5,000	3,500

Answer:

		Cash Flow Statement for the year ended March 31, 2019
	Particulars		Amount (â‚¹)	Amount (â‚¹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			43,750
	Add: Provision for Tax			18,750
	Profit Before Taxation			62,500
	Items to be Added:
	Depreciation and Amortization Expenses		15,000
	Loss on Sale of Furniture		1,500
	Items to be Deducted:
	Profit on Sale of Machinery		(2,500)
	Rent		(15,000)
	Interest on Investment		(2,000)	(3,000)
	Operating Profit before Working Capital Adjustments			59,500
	Less: Increase in Current Assets
	Trade Receivables		(5,000)
	Prepaid Expenses		(1,500)
	Less: Decrease in Current Liabilities
	Trade Payables		(2,500)
	Add: Increase in Current Liabilities
	Outstanding Expenses		3,000
	Add: Decrease in Current Assets
	Inventory (Finished goods â‚¹12,500 + Work-in-Progress â‚¹2,500)		15,000	9,000
	Cash Generated from Operations			68,500
	Less: Tax Paid			(18,750)
	*Net Cash Flows from Operating Activities*			49,750

Question 21:

Mars Ltd. has Plant and Machinery whose written down value on 1st April, 2017 was â‚¹9,60,000 and on 31st March, 2018 was â‚¹10,50,000. Depreciation for the year was â‚¹35,000. In the beginning of the year, a part of plant was sold for â‚¹45,000 which had a written down value of â‚¹30,000.
Calculate Cash Flow from Investing Activities

Answer:

Cash Flow from Investing Activities for the year ended March 31, 2017
	Particulars		Amount (Rs)	Amount (Rs)
		Purchase of Plant and Machinery	(1,55,000)
		Sale of Plant and Machinery	45,000
	*Net Cash Used in Investing Activities*			(1,10,000)

Working Notes:

Plant and Machinery Account
Dr.				Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Balance b/d	9,60,000	Depreciation	35,000
Profit and Loss A/c (Profit on Sale)	15,000	Bank A/c (Sale)	45,000
Bank A/c (Purchase)	1,55,000	Balance c/d	10,50,000
	11,30,000		11,30,000

Question 22:

From the following details. calculate Cash Flow from Investing Activities


Particulars	Closing (â‚¹)	Opening (â‚¹)
Machinery (At Cost)	10,00,000	9,50,000
Accumulated Depreciation	1,50,000	1,10,000
Patents	2,00,000	3,00,000

Additional Information:

During the year, machine costing â‚¹ 90,000 with accumulated depreciation of â‚¹ 60,000 was sold for â‚¹ 50,000.
Patents written off were â‚¹ 50,000 while a part of patents were sold at a profit of â‚¹ 40,000.

Answer:

Cash Flow from Investing Activities
	Particulars		Amount (Rs)	Amount (Rs)
		Purchase of Machinery *(WN1)*	(1,40,000)
		Sale of Machinery	50,000
		Sale of Patents *(WN3)*	90,000	Nil
	*Net Cash Used in Investing Activities*			Nil

Working Notes:

WN1:

Machinery Account
Dr.				Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Balance b/d	9,50,000	Provision for Depreciation A/c	60,000
Profit and Loss A/c (Profit on Sale)	20,000	Bank A/c (Sale)	50,000
Bank A/c (Purchase)	1,40,000	Balance c/d	10,00,000
	11,10,000		11,10,000

WN2:

Patents Account
Dr.				Cr.
Particulars	Amount (Rs)	Particulars	Amount (Rs)
Balance b/d	3,00,000	Patents Written off	50,000
Profit and Loss A/c (Profit on Sale)	40,000	Bank A/c (Sale) (Balancing Figure)	90,000
		Balance c/d	2,00,000
	3,40,000		3,40,000

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

Question 23:

Welprint Ltd. has given the following information:	â‚¹
Machinery as on 1st April, 2018	50,000
Machinery as on 31st March, 2019	60,000
Accumulated Depreciation on 1st April, 2018	25,000
Accumulated Depreciation on 31st march, 2019	15,000

During the year, a machine costing â‚¹ 25,000 (accumulated depreciation thereon â‚¹ 15,000) was sold for â‚¹ 13,000.

Calculate Cash Flow from Investing Activities on the basis of the above information.

Answer:

Cash Flow Statement
	Particulars	Amount (â‚¹)	Amount (â‚¹)
	Cash Flow from Investing Activities
	Purchase of Machinery	(35,000)
	Sale of Machinery	13,000	(22,000)
	Cash Used in Investing Activity		(22,000)

Working Notes:

Machinery Account
Dr.				Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	50,000	Bank A/c	13,000
Profit and Loss A/c	3,000	Accumulated Depreciation A/c	15,000
Bank A/c (Bal. Fig.)	35,000	Balance c/d	60,000
	88,000		88,000

Accumulated Depreciation Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Machinery A/c	15,000	Balance b/d	25,000
Balance c/d	15,000	Profit and Loss A/c (Bal. Fig.)	5,000
	30,000		30,000

Question 24:

From the following details. Calculate Cash Flow from Investing Activities


Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
Investment in 10% Debentures	10,00,000	5,00,000
Land and Building	15,00,000	9,00,000

Additional Information:
1. Half of the investment held in the beginning of the year were sold at 10% profit.
2. Depreciation on Land and Building was â‚¹ 50,000 for the year.
3. Interest received on investments â‚¹ 75,000.

Answer:

Cash Flow from Investing Activities for the year ended March 31, 2019
	Particulars		Amount (â‚¹)	Amount (â‚¹)
		Purchase of Land and Building *(WN1)*	(6,50,000)
		Interest received on Investments	75,000
		Sale of Debentures *(WN2)*	2,75,000
		Purchase of Debentures (WN2)	(7,50,000)	(10,50,000)
	*Net Cash Used in Investing Activities*			(10,50,000)

Working Notes:

WN1:

Land and Building Account
Dr.				Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	9,00,000	Depreciation A/c	50,000
Bank A/c (Purchase)	6,50,000	Balance c/d	15,00,000
	15,50,000		15,50,000

WN2:

Investment in Debentures Account
Dr.				Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	5,00,000	Bank A/c (Sale)	2,75,000
Profit and Loss A/c (Profit on sale)	25,000	Balance c/d	10,00,000
Bank A/c (Purchase)	7,50,000
	12,75,000		12,75,000

Question 25:

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

	â‚¹		â‚¹
Purchase of Machine	2,50,000	Purchase of Investments	1,60,000
Purchase of Goodwill	1,00,000	Sale of Patents	40,000
Sale of Machine	35,000	Interest and Dividend Received	10,000
Sale of Investment	50,000

A building was purchased as investment out of surplus which was let out for commercial purposes.
Rent Received â‚¹20,000.

Answer:

Cash Flow from Investing Activities
	Particulars	Amount (Rs)	Amount (Rs)
	Purchase of Machine	(2,50,000)
	Purchase of Goodwill	(1,00,000)
	Purchase of Investments	(1,50,000)
	Sale of Machine	35,000
	Sale of Investment	50,000
	Sale of Patents	40,000
	Interest and Dividend Received	10,000
	Rent Received	20,000
	*Net Cash Used in Investing Activities*		(3,45,000)

Question 26:

From the following Balance Sheet of Combiplast Ltd. for the year ended 31st March, 2019 and additional information, calculate Cash Flow from Investing Activities:

Particulars ulars	Note No.	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital		7,50,000	5,00,000
(b) Reserves and Surplus		10,00,000	8,50,000
2. Current Liabilities		4,50,000	3,50,000
Total Total Expenses		22,00,000	17,00,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets−Tangible Assets	1	12,00,000	12,00,000
(b) Non-Current Investments		5,00,000	3,00,000
2. Current Assets
(a) Trade Receivables		3,00,000	1,10,000
(b) Cash and Cash Equivalents		2,00,000	90,000
Total		22,00,000	17,00,000

Notes to Accounts

Particulars	31st March, 2019 (â‚¹)	31st March, 2018 (â‚¹)
I. Tangible Assets
Land	3,00,000	3,00,000
Building	4,00,000	4,00,000
Plant and Machinery	5,00,000	5,00,000
	12,00,000	12,00,000

Additional Information: During the year the company sold machinery at Book Value of â‚¹ 1,50,000.

Answer:

		Cash Flow Statement for the year ended March 31, 2019
	Particulars			Amount (â‚¹)	Amount (â‚¹)

B	Cash Flow from Investing Activities
			Sale of Machinery	1,50,000
			Purchase of Machinery	(1,50,000)
			Purchase of Non-Current Investments	(2,00,000)
	*Net Cash Used in Investing Activities*				(2,00,000)

Working Notes:

Plant & Machinery Account
Dr.				Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	5,00,000	Bank A/c (Sale)	1,50,000
Bank A/c (Purchase- Bal. Fig.)	1,50,000	Balance c/d	5,00,000

	6,50,000		6,50,000

Question 27:

From the following information, calculate Cash Flow from Investing Activities

Particular	31^st March, 2019 (â‚¹)	31^st March, 2018 (â‚¹)
Plant and Machinery	10,00,000	8,50,000
Investment (Long-term)	1,00,000	40,000
Land (At Cost)	1,00,000	2,00,000

Additional Information:
1. Depreciation charged on Plant and Machinery â‚¹ 50,000.
2. Plant and Machinery with a Book Value of â‚¹ 60,000 was sold for â‚¹ 40,000.
3. Land was sold at a profit of â‚¹ 60,000.
4. No investment was sold during the year.

Answer:

Cash Flow from Investing Activities
	Particulars	Amount (â‚¹)	Amount (â‚¹)
	Purchase of Plant and Machinery (*WN1*)	(2,60,000)
	Purchase of Investments	(60,000)
	Sale of Plant and Machinery (*WN1*)	40,000
	Sale of Land (*WN2*)	1,60,000
	*Net Cash Used in Investing Activities*		(1,20,000)

Working Notes:

WN1

Plant and Machinery Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	8,50,000	Depreciation A/c	50,000
Bank A/c (Purchases- Bal. Fig.)	2,60,000	Bank A/c (Sale)	40,000
		Profit and Loss A/c (Loss on Sale)	20,000
		Balance c/d	10,00,000
	11,10,000		11,10,000

WN2

Land Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	2,00,000	Bank A/c (Sale- Bal. Fig.)	1,60,000
Profit and Loss A/c (Profit on Sale)	60,000	Balance c/d	1,00,000
	2,60,000		2,60,000

Question 28:

From the following extracts of a company, calculate Cash Flow from Investing Activities:

Particular	31^st March, 2019 (â‚¹)	31^st March, 2018 (â‚¹)
Goodwill	75,000	1,00,000
Patents	1,00,000	75,000
Land	90,000	1,00,000
Furniture	2,46,000	21,000
Plant and Machinery (Net)	2,00,000	2,00,000
10% Investments	1,80,000	2,00,000
Accrued Interest on Investments	6,000	...

Answer:

Cash Flow from Investing Activities
	Particulars	Amount (â‚¹)	Amount (â‚¹)
	Purchase of Patents	(25,000)
	Purchase of Furniture	(2,25,000)
	Interest received on Investment	14,000
	Sale of Investment	20,000
	Sale of Land	10,000
	*Net Cash Used in Investing Activities*		(2,06,000)

Note: It has been assumed that Investments have been sold at their Book Value at the end of the accounting period.

Working Notes:

Computation of Interest on Investments

Question 29:

Calculate Cash Flow from Investing Activities from the following information:

Particular	31^st March, 2019 (â‚¹)	31^st March, 2018 (â‚¹)
Investment in Land	3,00,000	3,00,000
Shares in Damodar Ltd.	1,50,000	1,50,000
12% Long-term Investments	80,000	50,000
Plant and Machinery	7,50,000	6,00,000
Patents	70,000	1,00,000
Goodwill	1,50,000	1,00,000

Additional Information:
1. A piece of land was purchased as an investment out of surplus. It was let out for commercial purpose and the rent received was â‚¹ 20,000.
2. Dividend received from Damodar Ltd. @ 12%.
3. Patents written off to the extent of â‚¹ 20,000. Some patents were sold at a profit of â‚¹ 10,000.
4. A machine costing â‚¹ 80,000 (depreciation provided thereon â‚¹ 30,000) was sold for â‚¹ 35,000. Depreciation charged during the year was â‚¹ 70,000.
5. During the year 12% investments were purchased for â‚¹ 1,00,000 and some investments were sold at a profit of â‚¹ 10,000. Interest on investments for the year was duly received.

Answer:

Cash Flow from Investing Activities
	Particulars	Amount (â‚¹)	Amount (â‚¹)
	Purchase of Plant and Machinery	(2,70,000)
	Purchase of Investment	(1,00,000)
	Purchase of Goodwill	(50,000)
	Rent Received	20,000
	Dividend Received (1,50,000 × 12%)	18,000
	Sale of Plant and Machinery	35,000
	Sale of Investment	80,000
	Interest on Investments	6,000
	Sale of Patents	20,000
	*Net Cash Used in Investing Activities*		(2,41,000)

Working Notes:

WN1 Computation of Interest on Investments

Interest on 12% Long-term Investments =

WN2

Patents Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	1,00,000	Profit and Loss A/c (Written-off)	20,000
Profit and Loss A/c (Profit on Sale)	10,000	Bank A/c (Sale- Bal. Fig.)	20,000
		Balance c/d	70,000
	1,10,000		1,10,000

WN3

12% Long-Term Investments Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	50,000	Bank A/c (Sale- Bal. Fig.)	80,000
Bank A/c (Purchase)	1,00,000	Balance c/d	80,000
Profit and Loss A/c (Profit on Sale)	10,000
	1,60,000		1,60,000

WN3

Plant and Machinery Account
Dr.		Cr.
Particulars	Amount (â‚¹)	Particulars	Amount (â‚¹)
Balance b/d	6,00,000	Depreciation A/c	70,000
Bank A/c (Purchase- Bal. Fig.)	2,70,000	Bank A/c (Sale)	35,000
		Profit and Loss A/c (Loss on Sale)	15,000
		Balance c/d	7,50,000
	8,70,000		8,70,000

Analysis Of Financial Statements Ts Grewal 2019 Solutions for Class 12 Commerce Accountancy Chapter 5 - Cash Flow Statement

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