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Page No 5.100:

Question 48:

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 (2,400 – 2,000)

400

 

 

Proposed Dividend

11,600

 

 

Interim Dividend

9,000

 

 

Provision for Taxation

9,400

 

 

Profit Before Taxation

30,400

 

 

Items to be Added:

 

 

 

Loss on Sale of Fixed Assets

4,000

 

 

Interest on Debentures

1,200

 

 

Depreciation

14,000

 

 

Operating Profit before Working Capital Adjustments

49,600

 

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

(8,000)

 

 

Inventories

(10,000)

 

 

Prepaid Expenses

(400)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(2,000)

 

 

Cash Generated from Operations

29,200

 

 

Less: Tax Paid

(7,000)

 

 

Net Cash Flow from Operating Activities

 

22,200

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Sale of Fixed Assets

10,000

 

 

Purchase of Fixed Assets

(18,000)

 

 

Net Cash from (used in) Investing Activities

 

(8,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Share Capital

25,000

 

 

Proceeds from Issue of 10% Debentures

2,000

 

 

Interim Dividend

(9,000)

 

 

Dividend Paid

(10,000)

 

 

Interest on Debentures

(1,200)

 

 

Redemption of 12% Preference Share Capital

(5,000)

 

 

Net Cash Flow from Financing Activities

 

1,800

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

16,000

 

Add: Cash and Cash Equivalent in the beginning of the period (2,400 – 25,000)

 

(22,600)

 

Cash and Cash Equivalents at the end of the period (7,000 – 13,600)

 

(6,600)

 

 

 

 

Working Notes:

WN1

Fixed Assets Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

1,82,000

Bank A/c (Sale)

10,000

Bank A/c (Purchase- Bal. Fig.)

18,000

Profit and Loss A/c (Loss on Sale)

4,000

 

 

Accumulated Depreciation A/c

6,000

 

 

Balance c/d

1,80,000

 

2,00,000

 

2,00,000

 

 

 

 

WN2

Accumulated Depreciation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

To Fixed Assets A/c

6,000

Balance b/d

22,000

To Balance c/d

30,000

Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)

14,000

 

36,000

 

36,000

 

 

 

 

WN3

Provision for Taxation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Bank A/c (Tax Paid)

7,000

Balance b/d

6,000

Balance c/d

8,400

Profit and Loss A/c (Bal. Fig.)

9,400

 

15,400

 

15,400

 

 

 

 

 



Page No 5.101:

Question 49:

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 (2,400 – 2,000)

400

 

 

Proposed Dividend

11,600

 

 

Interim Dividend

9,000

 

 

Provision for Taxation

9,400

 

 

Profit Before Taxation

30,400

 

 

Items to be Added:

 

 

 

Loss on Sale of Fixed Assets

4,000

 

 

Interest on Debentures

1,200

 

 

Depreciation

14,000

 

 

Operating Profit before Working Capital Adjustments

49,600

 

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

(8,000)

 

 

Inventories

(10,000)

 

 

Prepaid Expenses

(400)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(2,000)

 

 

Cash Generated from Operations

29,200

 

 

Less: Tax Paid

(7,000)

 

 

Net Cash Flow from Operating Activities

 

22,200

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Sale of Fixed Assets

10,000

 

 

Purchase of Fixed Assets

(18,000)

 

 

Net Cash from (used in) Investing Activities

 

(8,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Share Capital

25,000

 

 

Proceeds from Issue of 10% Debentures

2,000

 

 

Interim Dividend

(9,000)

 

 

Dividend Paid

(10,000)

 

 

Interest on Debentures

(1,200)

 

 

Redemption of 12% Preference Share Capital

(5,000)

 

 

Net Cash Flow from Financing Activities

 

1,800

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

16,000

 

Add: Cash and Cash Equivalent in the beginning of the period (2,400 – 25,000)

 

(22,600)

 

Cash and Cash Equivalents at the end of the period (7,000 – 13,600)

 

(6,600)

 

 

 

 

Working Notes:

WN1

Fixed Assets Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

1,82,000

Bank A/c (Sale)

10,000

Bank A/c (Purchase- Bal. Fig.)

18,000

Profit and Loss A/c (Loss on Sale)

4,000

 

 

Accumulated Depreciation A/c

6,000

 

 

Balance c/d

1,80,000

 

2,00,000

 

2,00,000

 

 

 

 

WN2

Accumulated Depreciation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

To Fixed Assets A/c

6,000

Balance b/d

22,000

To Balance c/d

30,000

Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)

14,000

 

36,000

 

36,000

 

 

 

 

WN3

Provision for Taxation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Bank A/c (Tax Paid)

7,000

Balance b/d

6,000

Balance c/d

8,400

Profit and Loss A/c (Bal. Fig.)

9,400

 

15,400

 

15,400

 

 

 

 

 

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

1,80,000

 

 

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

 

 

Redemption of Long-Term Loan

(30,000)

 

 

Interest (Finance Cost)

(15,000)

 

 

Net Cash Flow from Financing Activities

 

55,000

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(12,000)

 

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 – 13,000)

 

53,000

 

 

 

 

Working Notes:

WN1

Provision for Taxation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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



Page No 5.103:

Question 50:

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

1,80,000

 

 

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

 

 

Redemption of Long-Term Loan

(30,000)

 

 

Interest (Finance Cost)

(15,000)

 

 

Net Cash Flow from Financing Activities

 

55,000

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(12,000)

 

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 – 13,000)

 

53,000

 

 

 

 

Working Notes:

WN1

Provision for Taxation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

Answer:

Cash Flow Statement

for the year ended March 31, 2013

 

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 from 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 or Decrease 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

 

 

 

 

 



Page No 5.104:

Question 51:

Cash Flow Statement

for the year ended March 31, 2013

 

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 from 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 or Decrease 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

 

 

 

 

 

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 (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 or Decrease 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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 



Page No 5.105:

Question 52:

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 (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 or Decrease 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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

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 (90,000 – 50,000)

40,000

 

 

Transfer to General Reserve

40,000

 

 

Proposed Dividend

22,500

 

 

Provision for Taxation

80,000

 

 

Profit before Taxation

1,82,500

 

 

Items to be Added:

 

 

 

Depreciation on Fixed Assets

10,000

 

 

Interest on Bank Loan

5,000

 

 

Interest on Debentures

9,000

 

 

Operating Profit before Working Capital Adjustments

2,06,500

 

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

10,000

 

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

(50,000)

 

 

Inventories

(26,500)

 

 

Cash Generated from operations

1,40,000

 

 

Less: Tax Paid

(60,000)

 

 

Net Cash Flows from Operating Activities

 

80,000

 

 

 

 

B

Cash Flow from Investing Activities

-

 

 

Net Cash Flow from or Used in Investing Activities

 

-

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Shares

50,000

 

 

Proceeds from Issue of 8% Preference Share Capital

50,000

 

 

Redemption of 15% Debentures

(80,000)

 

 

Redemption of Loan from Bank

(50,000)

 

 

Interest on Debentures

(9,000)

 

 

Interest on Loan From bank

(5,000)

 

 

Dividend Paid

(10,000)

 

 

Net Cash Flow from or Used in Financing Activities

 

(54,000)

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

26,000

 

Add: Cash and Cash Equivalent in the beginning of the period (20,000 –  45,000)* See Note-2 

 

 

(25,000)

 

Cash and Cash Equivalents at the end of the period (31,000 30,000)

 

 

1,000

 

 

 

 

 

Working Notes: 1

Machinery Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

4,10,000

Depreciation

10,000

 

 

Balance c/d

4,00,000

 

4,10,000

 

4,10,000

 

 

 

 

 

Note:

The net cash and cash equivalents have been ascertained in the following manner.

Net Opening Cash and Cash Equivalents = Opening Cash and Cash Equivalents i.e. Rs 20,000 (including Current Investments) less Opening Balance of Bank Overdraft amount i.e. Rs 45,000 = (Rs 25,000)

Similarly, Net Closing Cash and Cash Equivalents = Closing Cash and Cash Equivalents i.e. Rs 31,000 (including Current Investments) less Closing Balance of Bank Overdraft amount i.e. Rs 30,000 = Rs 1,000



Page No 5.106:

Question 53:

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 (90,000 – 50,000)

40,000

 

 

Transfer to General Reserve

40,000

 

 

Proposed Dividend

22,500

 

 

Provision for Taxation

80,000

 

 

Profit before Taxation

1,82,500

 

 

Items to be Added:

 

 

 

Depreciation on Fixed Assets

10,000

 

 

Interest on Bank Loan

5,000

 

 

Interest on Debentures

9,000

 

 

Operating Profit before Working Capital Adjustments

2,06,500

 

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

10,000

 

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

(50,000)

 

 

Inventories

(26,500)

 

 

Cash Generated from operations

1,40,000

 

 

Less: Tax Paid

(60,000)

 

 

Net Cash Flows from Operating Activities

 

80,000

 

 

 

 

B

Cash Flow from Investing Activities

-

 

 

Net Cash Flow from or Used in Investing Activities

 

-

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Shares

50,000

 

 

Proceeds from Issue of 8% Preference Share Capital

50,000

 

 

Redemption of 15% Debentures

(80,000)

 

 

Redemption of Loan from Bank

(50,000)

 

 

Interest on Debentures

(9,000)

 

 

Interest on Loan From bank

(5,000)

 

 

Dividend Paid

(10,000)

 

 

Net Cash Flow from or Used in Financing Activities

 

(54,000)

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

26,000

 

Add: Cash and Cash Equivalent in the beginning of the period (20,000 –  45,000)* See Note-2 

 

 

(25,000)

 

Cash and Cash Equivalents at the end of the period (31,000 30,000)

 

 

1,000

 

 

 

 

 

Working Notes: 1

Machinery Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

4,10,000

Depreciation

10,000

 

 

Balance c/d

4,00,000

 

4,10,000

 

4,10,000

 

 

 

 

 

Note:

The net cash and cash equivalents have been ascertained in the following manner.

Net Opening Cash and Cash Equivalents = Opening Cash and Cash Equivalents i.e. Rs 20,000 (including Current Investments) less Opening Balance of Bank Overdraft amount i.e. Rs 45,000 = (Rs 25,000)

Similarly, Net Closing Cash and Cash Equivalents = Closing Cash and Cash Equivalents i.e. Rs 31,000 (including Current Investments) less Closing Balance of Bank Overdraft amount i.e. Rs 30,000 = Rs 1,000

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

25,000

 

 

Proposed Dividend

15,000

 

 

Provision for Taxation

23,000

 

 

Profit Before Taxation

63,000

 

 

Items to be Added:

 

 

 

Depreciation on Fixed Assets

80,000

 

 

Goodwill Written-off

25,000

 

 

Interest on Debentures

10,600

 

 

Operating Profit before Working Capital Adjustments

1,78,600

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(20,000)

 

 

Trade Receivables

(22,000)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(5,000)

 

 

Add: Decrease in Current Assets

 

 

 

Cash Generated from operations

1,31,600

 

 

Less: Tax Paid

(18,000)

 

 

Net Cash Flow from Operating Activities

 

1,13,600

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Land and Building

(80,000)

 

 

Purchase of Investments

(50,000)

 

 

Net Cash from (used in) Investing Activities

 

(1,30,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Share Capital

1,00,000

 

 

Redemption of Debentures

(90,000)

 

 

Interest on Debentures

(10,600)

 

 

Dividend Paid

(10,000)

 

 

Net Cash from (used in) Financing Activities

 

(10,600)

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(27,000)

 

Add: Cash and Cash Equivalent in the beginning of the period (12,000 – 80,000)

 

(68,000)

 

Cash and Cash Equivalents at the end of the period (5,000 – 1,00,000)

 

(95,000)

 

 

 

 

Working Notes:

WN1 Calculation of Interest on Debentures

 

WN2

Provision For Taxation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Bank A/c (Tax Paid- Bal. Fig.)

18,000

Balance b/d

20,000

Balance c/d

25,000

Profit and Loss A/c (Provision made)

23,000

 

43,000

 

43,000

 

 

 

 

WN3

Land and Building Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

5,50,000

Depreciation

80,000

Bank A/c (Purchase- Bal. Fig.)

80,000

Balance c/d

5,50,000

 

6,30,000

 

6,30,000

 

 

 

 

 



Page No 5.107:

Question 54:

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

25,000

 

 

Proposed Dividend

15,000

 

 

Provision for Taxation

23,000

 

 

Profit Before Taxation

63,000

 

 

Items to be Added:

 

 

 

Depreciation on Fixed Assets

80,000

 

 

Goodwill Written-off

25,000

 

 

Interest on Debentures

10,600

 

 

Operating Profit before Working Capital Adjustments

1,78,600

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(20,000)

 

 

Trade Receivables

(22,000)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(5,000)

 

 

Add: Decrease in Current Assets

 

 

 

Cash Generated from operations

1,31,600

 

 

Less: Tax Paid

(18,000)

 

 

Net Cash Flow from Operating Activities

 

1,13,600

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Land and Building

(80,000)

 

 

Purchase of Investments

(50,000)

 

 

Net Cash from (used in) Investing Activities

 

(1,30,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Share Capital

1,00,000

 

 

Redemption of Debentures

(90,000)

 

 

Interest on Debentures

(10,600)

 

 

Dividend Paid

(10,000)

 

 

Net Cash from (used in) Financing Activities

 

(10,600)

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(27,000)

 

Add: Cash and Cash Equivalent in the beginning of the period (12,000 – 80,000)

 

(68,000)

 

Cash and Cash Equivalents at the end of the period (5,000 – 1,00,000)

 

(95,000)

 

 

 

 

Working Notes:

WN1 Calculation of Interest on Debentures

 

WN2

Provision For Taxation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Bank A/c (Tax Paid- Bal. Fig.)

18,000

Balance b/d

20,000

Balance c/d

25,000

Profit and Loss A/c (Provision made)

23,000

 

43,000

 

43,000

 

 

 

 

WN3

Land and Building Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

5,50,000

Depreciation

80,000

Bank A/c (Purchase- Bal. Fig.)

80,000

Balance c/d

5,50,000

 

6,30,000

 

6,30,000

 

 

 

 

 

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 (2,25,000 – 1,50,000)

75,000

 

 

Proposed Dividend

17,000

 

 

Provision for Taxation

40,500

 

 

Profit Before Taxation

1,32,500

 

 

Items to be Added:

 

 

 

Depreciation

40,000

 

 

Premium on Redemption of Debentures

5,000

 

 

Loss on Sale of Fixed Assets

1,000

 

 

Interest on Debentures

15,000

 

 

Operating Profit before Working Capital Adjustments

1,93,500

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(35,000)

 

 

Trade Receivables

(10,000)

 

 

Add: Increase in Current Liabilities

 

 

 

Outstanding Expenses

1,000

 

 

Trade Payables

45,000

 

 

Cash Generated from Operations

1,94,500

 

 

Less: Tax Paid

(37,500)

 

 

Net Cash Flow from Operating Activities

 

1,57,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Sale of Investments

45,000

 

 

Sale of Fixed Assets

4,000

 

 

Purchase of Fixed Assets

(1,20,000)

 

 

Purchase of Investments

(40,000)

 

 

Net Cash from (used in) Investing Activities

 

(1,11,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Share Capital

50,000

 

 

Redemption of 15% Debentures

(55,000)

 

 

Interest on Debentures

(15,000)

 

 

Dividend Paid

(15,000)

 

 

Net Cash from (used in) Financing Activities

 

(35,000)

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

11,000

 

Add: Cash and Cash Equivalent in the beginning of the period

 

32,500

 

Cash and Cash Equivalents at the end of the period

 

43,500

 

 

 

 

Working Notes:

WN1

Provision For Taxation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Bank A/c (Tax Paid)

37,500

Balance b/d

35,000

Balance c/d

38,000

Profit and Loss Account (Bal. Fig.)

40,500

 

75,500

 

75,500

 

 

 

 

WN2

Investments Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

90,000

By Bank A/c (Sale)

45,000

Capital Reserve (Profit on Sale of Investment)

5,000

Balance c/d

90,000

Bank A/c (Purchases- Bal. Fig.)

40,000

 

 

 

1,35,000

 

1,35,000

 

 

 

 

WN3

Non-Current Assets Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

5,00,000

Accumulated Depreciation

15,000

Bank A/c (Purchases- Bal. Fig.)

1,20,000

Bank A/c

4,000

 

 

Profit and Loss A/c (Loss on Sale)

1,000

 

 

Balance c/d

6,00,000

 

6,20,000

 

6,20,000

 

 

 

 

WN4

Accumulated Depreciation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Non-Current Assets A/c

15,000

Balance b/d

1,00,000

Balance c/d

1,25,000

Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)

40,000

 

1,40,000

 

1,40,000

 

 

 

 

WN5

15% Debenture Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Bank A/c

55,000

Balance b/d

1,50,000

Balance c/d

1,00,000

Premium on Redemption

5,000

 

1,55,000

 

1,55,000

 

 

 

 

 



Page No 5.79:

Question 1:

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 (2,25,000 – 1,50,000)

75,000

 

 

Proposed Dividend

17,000

 

 

Provision for Taxation

40,500

 

 

Profit Before Taxation

1,32,500

 

 

Items to be Added:

 

 

 

Depreciation

40,000

 

 

Premium on Redemption of Debentures

5,000

 

 

Loss on Sale of Fixed Assets

1,000

 

 

Interest on Debentures

15,000

 

 

Operating Profit before Working Capital Adjustments

1,93,500

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(35,000)

 

 

Trade Receivables

(10,000)

 

 

Add: Increase in Current Liabilities

 

 

 

Outstanding Expenses

1,000

 

 

Trade Payables

45,000

 

 

Cash Generated from Operations

1,94,500

 

 

Less: Tax Paid

(37,500)

 

 

Net Cash Flow from Operating Activities

 

1,57,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Sale of Investments

45,000

 

 

Sale of Fixed Assets

4,000

 

 

Purchase of Fixed Assets

(1,20,000)

 

 

Purchase of Investments

(40,000)

 

 

Net Cash from (used in) Investing Activities

 

(1,11,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Share Capital

50,000

 

 

Redemption of 15% Debentures

(55,000)

 

 

Interest on Debentures

(15,000)

 

 

Dividend Paid

(15,000)

 

 

Net Cash from (used in) Financing Activities

 

(35,000)

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

11,000

 

Add: Cash and Cash Equivalent in the beginning of the period

 

32,500

 

Cash and Cash Equivalents at the end of the period

 

43,500

 

 

 

 

Working Notes:

WN1

Provision For Taxation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Bank A/c (Tax Paid)

37,500

Balance b/d

35,000

Balance c/d

38,000

Profit and Loss Account (Bal. Fig.)

40,500

 

75,500

 

75,500

 

 

 

 

WN2

Investments Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

90,000

By Bank A/c (Sale)

45,000

Capital Reserve (Profit on Sale of Investment)

5,000

Balance c/d

90,000

Bank A/c (Purchases- Bal. Fig.)

40,000

 

 

 

1,35,000

 

1,35,000

 

 

 

 

WN3

Non-Current Assets Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

5,00,000

Accumulated Depreciation

15,000

Bank A/c (Purchases- Bal. Fig.)

1,20,000

Bank A/c

4,000

 

 

Profit and Loss A/c (Loss on Sale)

1,000

 

 

Balance c/d

6,00,000

 

6,20,000

 

6,20,000

 

 

 

 

WN4

Accumulated Depreciation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Non-Current Assets A/c

15,000

Balance b/d

1,00,000

Balance c/d

1,25,000

Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)

40,000

 

1,40,000

 

1,40,000

 

 

 

 

WN5

15% Debenture Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Bank A/c

55,000

Balance b/d

1,50,000

Balance c/d

1,00,000

Premium on Redemption

5,000

 

1,55,000

 

1,55,000

 

 

 

 

 

Answer:

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

Page No 5.79:

Question 2:

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

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.

Page No 5.79:

Question 3:

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.

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

Page No 5.79:

Question 4:

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

Answer:

 

Particulars

Amount

(Rs)

 

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

 



Page No 5.80:

Question 5:

 

Particulars

Amount

(Rs)

 

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

 

Answer:

 

Particulars

Amount

(Rs)

 

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

 

Page No 5.80:

Question 6:

 

Particulars

Amount

(Rs)

 

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

 

Answer:

 

Particulars

Amount

(Rs)

 

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

 



Page No 5.81:

Question 7:

 

Particulars

Amount

(Rs)

 

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

 

Answer:

 

Particulars

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (2,80,000 – 1,70,000)

1,10,000

 

Add: Proposed Dividend (Current Year)

1,00,000

 

Add: Provision for Tax (Current Year)

80,000

 

Add: Transfer to Reserve (1,20,000 – 80,000)

40,000

 

Profit Before Taxation and Extraordinary Items

3,30,000

 

Page No 5.81:

Question 8:

 

Particulars

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (2,80,000 – 1,70,000)

1,10,000

 

Add: Proposed Dividend (Current Year)

1,00,000

 

Add: Provision for Tax (Current Year)

80,000

 

Add: Transfer to Reserve (1,20,000 – 80,000)

40,000

 

Profit Before Taxation and Extraordinary Items

3,30,000

 

Answer:

Computation of Operating Profit before Working Capital Changes

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

 



Page No 5.82:

Question 9:

Computation of Operating Profit before Working Capital Changes

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

 

Answer:

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

 

Page No 5.82:

Question 10:

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

 

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (Net Income)

 

(30,000)

 

Operating Profit before Working Capital Changes

 

(30,000)

 

Add: Decrease in Current Assets

 

 

 

 

 Trade Receivables

 

20,000

 

Less: Increase in Current Assets

 

(10,000)

 

 

    Prepaid Insurance

 

(10,000)

 

Less: Decrease in Current Liabilities

 

(20,000)

 

 

    Outstanding Rent

(24,000)

 

 

 

Trade Payables

(40,000)

(64,000)

 

Cash Generated from operations

 

(84,000)

 

Less: Tax Paid

 

Nil

 

Net Cash Flow from (used in) Operating Activities

 

(84,000)

 

Page No 5.82:

Question 11:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (Net Income)

 

(30,000)

 

Operating Profit before Working Capital Changes

 

(30,000)

 

Add: Decrease in Current Assets

 

 

 

 

 Trade Receivables

 

20,000

 

Less: Increase in Current Assets

 

(10,000)

 

 

    Prepaid Insurance

 

(10,000)

 

Less: Decrease in Current Liabilities

 

(20,000)

 

 

    Outstanding Rent

(24,000)

 

 

 

Trade Payables

(40,000)

(64,000)

 

Cash Generated from operations

 

(84,000)

 

Less: Tax Paid

 

Nil

 

Net Cash Flow from (used in) Operating Activities

 

(84,000)

 

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

 



Page No 5.83:

Question 12:

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

 

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 Reserve

 

60,000

 

Profit Before extraordinary items

 

7,60,000

 

Items to be Added:

 

 

 

Depreciation on Fixed Assets

40,000

 

 

Goodwill Amortised

20,000

60,000

 

 

 

8,20,000

 

Items to be Deducted:

 

 

 

Gain on Sale of Land

 

(90,000)

 

Operating Profit before Working Capital Adjustments

 

7,30,000

 

Less: Decrease in Current Liabilities

 

 

 

 

   Trade Payables

(25,000)

 

 

Less: Increase in Current Assets

 

 

 

 

   Trade Receivables

(15,000)

(40,000)

 

 

 

 

6,90,000

 

Add:Decrease in Current Assets

 

 

 

 

   Prepaid Expenses

 

8,000

 

Cash Generated from Operations

 

6,98,000

 

Less: Tax Paid

 

Nil

 

Net Cash Flows from Operating Activities

 

6,98,000

 

Page No 5.83:

Question 13:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss

 

7,00,000

 

Add: Transfer to Reserve

 

60,000

 

Profit Before extraordinary items

 

7,60,000

 

Items to be Added:

 

 

 

Depreciation on Fixed Assets

40,000

 

 

Goodwill Amortised

20,000

60,000

 

 

 

8,20,000

 

Items to be Deducted:

 

 

 

Gain on Sale of Land

 

(90,000)

 

Operating Profit before Working Capital Adjustments

 

7,30,000

 

Less: Decrease in Current Liabilities

 

 

 

 

   Trade Payables

(25,000)

 

 

Less: Increase in Current Assets

 

 

 

 

   Trade Receivables

(15,000)

(40,000)

 

 

 

 

6,90,000

 

Add:Decrease in Current Assets

 

 

 

 

   Prepaid Expenses

 

8,000

 

Cash Generated from Operations

 

6,98,000

 

Less: Tax Paid

 

Nil

 

Net Cash Flows from Operating Activities

 

6,98,000

 

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

 

Page No 5.83:

Question 14:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

 

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

 

1,00,000

  Add: Proposed Dividend   1,10,000

 

Less: Compensation for Natural Disaster

 

(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: Net Tax Paid (1,20,000 – 10,000)   (1,10,000)
  Cash Flow from operations after Tax    

 

Add: Compensation for Natural Disaster

 

75,000

 

Net Cash Flows from Operating Activities

 

10,10,000

 



Page No 5.84:

Question 15:

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

 

1,00,000

  Add: Proposed Dividend   1,10,000

 

Less: Compensation for Natural Disaster

 

(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: Net Tax Paid (1,20,000 – 10,000)   (1,10,000)
  Cash Flow from operations after Tax    

 

Add: Compensation for Natural Disaster

 

75,000

 

Net Cash Flows from Operating Activities

 

10,10,000

 

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss

 

1,80,000

 

Add: Tax Expense

 

64,000

 

Profit Before Taxation

 

2,44,000

 

Items to be Added:

 

 

 

Loss on Sale of Assets

36,000

 

 

Goodwill Written-off

25,000

 

 

Depreciation and Amortisation Expenses

1,60,000

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)

 

Add: Increase in Current Assets

 

 

 

Inventories

 

16,000

 

Cash Generated from Operations

 

4,25,000

 

Less: Tax Paid

 

(64,000)

 

Net Cash Flows from Operating Activities

 

3,61,000

 

Page No 5.84:

Question 16:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss

 

1,80,000

 

Add: Tax Expense

 

64,000

 

Profit Before Taxation

 

2,44,000

 

Items to be Added:

 

 

 

Loss on Sale of Assets

36,000

 

 

Goodwill Written-off

25,000

 

 

Depreciation and Amortisation Expenses

1,60,000

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)

 

Add: Increase in Current Assets

 

 

 

Inventories

 

16,000

 

Cash Generated from Operations

 

4,25,000

 

Less: Tax Paid

 

(64,000)

 

Net Cash Flows from Operating Activities

 

3,61,000

 

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

 



Page No 5.85:

Question 17:

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

 

Answer:

Cash Flow from Operating Activities

for the year ended 31st March, 2013

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (Net Income)

15,00,000

 

 

Items to be Added:

 

 

 

 

Depreciation

6,00,000

 

 

Items to be Deducted:

21,00,000

 

 

 

Profit on Sale of Furniture

(1,50,000)

 

 

Operating Profit before Working Capital Changes

19,50,000

 

 

Add: Increase in Current Liabilities

 

 

 

 

Trade Payables

1,80,000

 

 

Less: Increase in Current Assets

 

 

 

 

Trade Receivables

(1,20,000)

 

 

Cash Generated from operations

20,10,000

 

 

Less: Tax Paid

Nil

 

 

Net Cash Flows from Operating Activities

 

20,10,000

 

 

Page No 5.85:

Question 18:

Cash Flow from Operating Activities

for the year ended 31st March, 2013

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (Net Income)

15,00,000

 

 

Items to be Added:

 

 

 

 

Depreciation

6,00,000

 

 

Items to be Deducted:

21,00,000

 

 

 

Profit on Sale of Furniture

(1,50,000)

 

 

Operating Profit before Working Capital Changes

19,50,000

 

 

Add: Increase in Current Liabilities

 

 

 

 

Trade Payables

1,80,000

 

 

Less: Increase in Current Assets

 

 

 

 

Trade Receivables

(1,20,000)

 

 

Cash Generated from operations

20,10,000

 

 

Less: Tax Paid

Nil

 

 

Net Cash Flows from Operating Activities

 

20,10,000

 

 

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (90,000 – 80,000)

 

10,000

 

Items to be Added

 

Nil

 

Operating Profit before Working Capital Adjustments

 

10,000

 

Less: Decrease in Current Liabilities

 

 

 

 

Trade Payables

 

(17,000)

 

Add: Increase in Current Liabilities

 

 

 

Expenses Outstanding

 

1,000

 

Less: Increase in Current Assets

 

 

 

 

Accrued Income

 

(1,000)

 

Add: Decrease in Current Assets

 

 

 

Inventories

10,000

 

 

Trade Receivables

2,000

12,000

 

Cash Generated from Operations

 

5,000

 

Less: Tax Paid

 

Nil

Net Cash Flows from Operating Activities

 

5,000

 

Page No 5.85:

Question 19:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (90,000 – 80,000)

 

10,000

 

Items to be Added

 

Nil

 

Operating Profit before Working Capital Adjustments

 

10,000

 

Less: Decrease in Current Liabilities

 

 

 

 

Trade Payables

 

(17,000)

 

Add: Increase in Current Liabilities

 

 

 

Expenses Outstanding

 

1,000

 

Less: Increase in Current Assets

 

 

 

 

Accrued Income

 

(1,000)

 

Add: Decrease in Current Assets

 

 

 

Inventories

10,000

 

 

Trade Receivables

2,000

12,000

 

Cash Generated from Operations

 

5,000

 

Less: Tax Paid

 

Nil

Net Cash Flows from Operating Activities

 

5,000

 

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (80,000 – 40,000)

 

40,000

 

Items to be Added

 

Nil

 

Operating Profit before Working Capital Adjustments

 

40,000

 

Less: Decrease in Current Liabilities

 

 

 

Bills Payables

 

(1,000)

 

Add: Increase in Current Liabilities

 

 

 

Creditors

2,000

 

 

Outstanding Expenses

1,000

3,000

 

Less: Increase in Current Assets

 

 

 

Debtors

(2,000)

 

 

Bills Receivables

(3,000)

(5,000)

 

Add: Decrease in Current Assets

 

 

 

Inventories

3,000

 

 

Prepaid Expenses

500

3,500

 

Cash Generated from Operations

 

40,500

 

Less: Tax Paid

 

Nil

 

Net Cash Flows from Operating Activities

 

40,500

 

 

Page No 5.85:

Question 20:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (80,000 – 40,000)

 

40,000

 

Items to be Added

 

Nil

 

Operating Profit before Working Capital Adjustments

 

40,000

 

Less: Decrease in Current Liabilities

 

 

 

Bills Payables

 

(1,000)

 

Add: Increase in Current Liabilities

 

 

 

Creditors

2,000

 

 

Outstanding Expenses

1,000

3,000

 

Less: Increase in Current Assets

 

 

 

Debtors

(2,000)

 

 

Bills Receivables

(3,000)

(5,000)

 

Add: Decrease in Current Assets

 

 

 

Inventories

3,000

 

 

Prepaid Expenses

500

3,500

 

Cash Generated from Operations

 

40,500

 

Less: Tax Paid

 

Nil

 

Net Cash Flows from Operating Activities

 

40,500

 

 

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (65,000 – 60,000)

 

5,000

 

Transfer to General Reserve

 

35,000

 

Dividend Equalisation Fund

 

22,000

 

Profit Before Taxation

 

62,000

 

Items to be Added:

 

 

 

Goodwill Written-off

 

10,000

 

Operating Profit before Working Capital Adjustments

 

72,000

 

Less: Decrease in Current Liabilities

 

 

 

Salary Outstanding

 

(18,000)

 

Less: Increase in Current Assets

 

 

 

Wages Prepaid

(2,000)

 

 

Bills Receivables

(41,000)

(43,000)

 

Add: Decrease in Current Assets

 

 

 

Debtors

 

47,000

 

Cash Generated from Operations

 

58,000

 

Less: Tax Paid

 

Nil

 

Net Cash Flows from Operating Activities

 

58,000

Note: Dividend Equalisation Fund is the amount of profits that are reserved for distributing the dividends in the future. Hence, it is an appropriation of profits and thus, it is added back to the profits.



Page No 5.86:

Question 21:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (65,000 – 60,000)

 

5,000

 

Transfer to General Reserve

 

35,000

 

Dividend Equalisation Fund

 

22,000

 

Profit Before Taxation

 

62,000

 

Items to be Added:

 

 

 

Goodwill Written-off

 

10,000

 

Operating Profit before Working Capital Adjustments

 

72,000

 

Less: Decrease in Current Liabilities

 

 

 

Salary Outstanding

 

(18,000)

 

Less: Increase in Current Assets

 

 

 

Wages Prepaid

(2,000)

 

 

Bills Receivables

(41,000)

(43,000)

 

Add: Decrease in Current Assets

 

 

 

Debtors

 

47,000

 

Cash Generated from Operations

 

58,000

 

Less: Tax Paid

 

Nil

 

Net Cash Flows from Operating Activities

 

58,000

Note: Dividend Equalisation Fund is the amount of profits that are reserved for distributing the dividends in the future. Hence, it is an appropriation of profits and thus, it is added back to the profits.

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (30,000 – 20,000)

 

10,000

 

Items to be Added:

 

 

 

Goodwill Written off

4,000

 

 

Provision for Depreciation (30,000 – 28,000)

2,000

6,000

 

Operating Profit before Working Capital Adjustments

 

16,000

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

(2,000)

 

 

Inventories

(3,000)

 

 

Prepaid Insurance

(200)

(5,200)

 

Cash Generated from operations

 

10,800

 

Less: Tax Paid

 

Nil

 

Net Cash Flows from Operating Activities

 

10,800

 

Page No 5.86:

Question 22:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (30,000 – 20,000)

 

10,000

 

Items to be Added:

 

 

 

Goodwill Written off

4,000

 

 

Provision for Depreciation (30,000 – 28,000)

2,000

6,000

 

Operating Profit before Working Capital Adjustments

 

16,000

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

(2,000)

 

 

Inventories

(3,000)

 

 

Prepaid Insurance

(200)

(5,200)

 

Cash Generated from operations

 

10,800

 

Less: Tax Paid

 

Nil

 

Net Cash Flows from Operating Activities

 

10,800

 

Answer:

Case (a)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Provision for Depreciation (2,50,000 – 2,00,000)

 

50,000

 

Net Cash Flows from Operating Activities

 

4,50,000

 

Case (b)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Goodwill written off

 

10,000

 

Net Cash Flows from Operating Activities

 

4,10,000

 

Case (c)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Provision for Taxation (1,50,000 – 1,00,000)

 

50,000

 

Net Cash Flows from Operating Activities

 

4,50,000

 

Case (d)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Transfer to General Reserve

 

20,000

 

Net Cash Flows from Operating Activities

 

4,20,000

 

Case (e)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Loss on Sale of Machinery

 

5,000

 

Provision for Depreciation

 

90,000

 

Net Cash Flows from Operating Activities

 

4,95,000

Working Notes

Plant and Machinery Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

4,00,000

Bank a/c  (Sale)

5,000

Bank A/c (Purchase- Bal. Fig.)

50,000

Accumulated Depreciation A/c

40,000

 

 

Profit and Loss A/c (Loss on Sale)

5,000

 

 

Balance c/d

4,00,000

 

4,50,000

 

4,50,000

 

 

 

 

 

Accumulated Depreciation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Plant and Machinery A/c

40,000

Balance b/d

1,00,000

Balance c/d

1,50,000

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

90,000

 

1,90,000

 

1,90,000

 

 

 

 

 



Page No 5.87:

Question 23:

Case (a)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Provision for Depreciation (2,50,000 – 2,00,000)

 

50,000

 

Net Cash Flows from Operating Activities

 

4,50,000

 

Case (b)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Goodwill written off

 

10,000

 

Net Cash Flows from Operating Activities

 

4,10,000

 

Case (c)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Provision for Taxation (1,50,000 – 1,00,000)

 

50,000

 

Net Cash Flows from Operating Activities

 

4,50,000

 

Case (d)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Transfer to General Reserve

 

20,000

 

Net Cash Flows from Operating Activities

 

4,20,000

 

Case (e)

Cash Flow from Operating Activities

for the year ended 31st March, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (6,00,000 – 2,00,000)

 

4,00,000

 

Items to be Added:

 

 

 

Loss on Sale of Machinery

 

5,000

 

Provision for Depreciation

 

90,000

 

Net Cash Flows from Operating Activities

 

4,95,000

Working Notes

Plant and Machinery Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

4,00,000

Bank a/c  (Sale)

5,000

Bank A/c (Purchase- Bal. Fig.)

50,000

Accumulated Depreciation A/c

40,000

 

 

Profit and Loss A/c (Loss on Sale)

5,000

 

 

Balance c/d

4,00,000

 

4,50,000

 

4,50,000

 

 

 

 

 

Accumulated Depreciation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Plant and Machinery A/c

40,000

Balance b/d

1,00,000

Balance c/d

1,50,000

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

90,000

 

1,90,000

 

1,90,000

 

 

 

 

 

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (48,000 – 30,000)

 

18,000

 

Transfer to General Reserve

 

30,000

 

Proposed Dividend

 

50,000

 

Provision for Tax

 

50,000

 

Profit Before Taxation

 

1,48,000

 

Items to be Added:

 

 

Goodwill Written-off

25,000

 

 

Depreciation on Building (2,00,000 – 1,70,000)

30,000

55,000

 

Operating Profit before Working Capital Adjustments

 

2,03,000

 

Less: Decrease in Current Liabilities

 

 

 

Other Current Liabilities

 

(4,000)

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

 

28,000

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

 

(92,000)

 

Add: Decrease in Current Assets

 

 

 

Inventories

 

10,000

 

Cash Generated from Operations

 

1,45,000

 

Less: Tax Paid

 

(40,000)

 

Net Cash Flows from Operating Activities

 

1,05,000

 



Page No 5.88:

Question 24:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss (48,000 – 30,000)

 

18,000

 

Transfer to General Reserve

 

30,000

 

Proposed Dividend

 

50,000

 

Provision for Tax

 

50,000

 

Profit Before Taxation

 

1,48,000

 

Items to be Added:

 

 

Goodwill Written-off

25,000

 

 

Depreciation on Building (2,00,000 – 1,70,000)

30,000

55,000

 

Operating Profit before Working Capital Adjustments

 

2,03,000

 

Less: Decrease in Current Liabilities

 

 

 

Other Current Liabilities

 

(4,000)

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

 

28,000

 

Less: Increase in Current Assets

 

 

 

Trade Receivables

 

(92,000)

 

Add: Decrease in Current Assets

 

 

 

Inventories

 

10,000

 

Cash Generated from Operations

 

1,45,000

 

Less: Tax Paid

 

(40,000)

 

Net Cash Flows from Operating Activities

 

1,05,000

 

Answer:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss

 

2,00,000

 

Add: Tax Expenses

 

25,000

 

Profit Before Taxation

 

2,25,000

 

Items to be Added:

 

 

 

Goodwill Written-off

28,000

 

 

Depreciation and Amortisation Expenses

44,000

72,000

 

Operating Profit before Working Capital Adjustments

 

2,97,000

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

 

(8,000)

 

Add: Increase in Current Liabilities

 

 

 

Outstanding Expenses

 

600

 

Less: Increase in Current Assets

 

 

 

Inventories

(25,000)

 

 

Trade Receivables

(6,000)

 

 

Prepaid Expenses

(1,500)

(32,500)

 

Cash Generated from Operations

 

2,57,100

 

Less: Tax Paid

 

(25,000)

 

Net Cash Flows from Operating Activities

 

2,32,100

 



Page No 5.89:

Question 25:

Cash Flow from Operating Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Profit as per Statement of Profit and Loss

 

2,00,000

 

Add: Tax Expenses

 

25,000

 

Profit Before Taxation

 

2,25,000

 

Items to be Added:

 

 

 

Goodwill Written-off

28,000

 

 

Depreciation and Amortisation Expenses

44,000

72,000

 

Operating Profit before Working Capital Adjustments

 

2,97,000

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

 

(8,000)

 

Add: Increase in Current Liabilities

 

 

 

Outstanding Expenses

 

600

 

Less: Increase in Current Assets

 

 

 

Inventories

(25,000)

 

 

Trade Receivables

(6,000)

 

 

Prepaid Expenses

(1,500)

(32,500)

 

Cash Generated from Operations

 

2,57,100

 

Less: Tax Paid

 

(25,000)

 

Net Cash Flows from Operating Activities

 

2,32,100

 

Answer:

Cash Flow from Investing Activities

for the year ended March 31, 2014

 

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

 

 

 

 

 

Page No 5.89:

Question 26:

Cash Flow from Investing Activities

for the year ended March 31, 2014

 

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

 

 

 

 

 

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

 

 

 

 

 

 

 

Page No 5.89:

Question 27:

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

 

 

 

 

 

 

 

Answer:

Cash Flow from Investing Activities

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

 

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

Page No 5.89:

Question 28:

Cash Flow from Investing Activities

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

 

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

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)

 

Page No 5.89:

Question 29:

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)

 

Answer:

 

Cash Flow Statement

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

 

 

 

 

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 



Page No 5.90:

Question 30:

 

Cash Flow Statement

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

 

 

 

 

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

Answer:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

Page No 5.90:

Question 31:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

Answer:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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 ath their Book Value at the end of the accounting period.

Working Notes:

Computation of Interest on Investments



Page No 5.91:

Question 32:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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 ath their Book Value at the end of the accounting period.

Working Notes:

Computation of Interest on Investments

Answer:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

Page No 5.91:

Question 33:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

Answer:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

To Machinery A/c

20,000

Balance b/d

1,00,000

Balance c/d

1,70,000

Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)

90,000

 

1,90,000

 

1,90,000

 

 

 

 

 

Page No 5.91:

Question 34:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

Answer:

Cash Flow from Investing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Purchase of Machinery

(6,20,000)

 

 

Purchase of Investments

(2,40,000)

 

 

Purchase of Goodwill

(1,00,000)

 

 

Sale of Machinery

2,00,000

 

 

Rent Received

50,000

 

 

Dividend Received

20,000

 

 

Sale of Investments

80,000

 

 

Interest on Debentures

8,000

 

 

Sale of Patents

1,50,000

 

 

Net Cash Used in  Investing Activities

 

(4,52,000)

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



Page No 5.92:

Question 35:

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.

Answer:

Cash Flow from Financing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Proceeds from Issue of Equity Shares

1,10,000

 

 

Redemption of 12% Debentures

(50,000)

 

 

Interest Paid

(18,000)

 

 

Net Cash Flows from Financing Activities

 

42,000

 

Page No 5.92:

Question 36:

Cash Flow from Financing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

 

Answer:

Cash Flow from Financing Activities

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

41,500

 

 

 

 

 

Page No 5.92:

Question 37:

Cash Flow from Financing Activities

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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

41,500

 

 

 

 

 

Answer:

Cash Flow Statement

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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 (used in) Financing Activities

 

(5,000)

 

 

 

 

Working Notes:

Machinery Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

To Machinery A/c (Bal. Fig.)

4,000

Balance b/d

10,000

Balance c/d

12,000

By Profit and Loss A/c (Dep. charged during the year)

6,000

 

16,000

 

16,000

 

 

 

 

 



Page No 5.93:

Question 38:

Cash Flow Statement

for the year ended March 31, 2014

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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 (used in) Financing Activities

 

(5,000)

 

 

 

 

Working Notes:

Machinery Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

Answer:

Cash Flow from Financing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

Proceeds from Issue of 12% Debentures

1,00,000

 

 

Interest Paid

(19,000)

 

 

Dividend Paid

(50,000)

 

 

Net Cash Flows from Financing Activities

 

31,000

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

Page No 5.93:

Question 39:

Cash Flow from Financing Activities

 

Particulars

Amount

(Rs)

Amount

(Rs)

 

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.

Answer:

Cash Flow Statement

 

Particulars

Amount

(Rs)

Amount

(Rs)

A

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss (Net Profit)

2,000

 

 

Profit Before Taxation

2,000

 

 

Items to be Added:

 

 

Operating Profit before Working Capital Adjustments

2,000

 

 

Add: Decrease in Current Assets

 

 

 

Stock

8,000

 

 

Add: Increase in Current Liabilities

 

 

 

Bills Payable

12,000

 

 

Cash Generated from Operations

22,000

 

 

Less: Tax Paid

 

 

Net Cash Flow from Operating Activities

 

22,000

 

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

 

Sale of Fixed Assets

30,000

 

 

Net Cash Flows from Investing Activities

 

30,000

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Repayment of Long-Term Loan

(50,000)

 

 

Net Cash Used in Financing Activities

 

(50,000)

 

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

2,000

 

 

Add: Cash and Cash Equivalent in the beginning of the period

 

15,000

 

Cash and Cash Equivalents at the end of the period

 

17,000

 

 

 

 

 

Page No 5.93:

Question 40:

Cash Flow Statement

 

Particulars

Amount

(Rs)

Amount

(Rs)

A

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss (Net Profit)

2,000

 

 

Profit Before Taxation

2,000

 

 

Items to be Added:

 

 

Operating Profit before Working Capital Adjustments

2,000

 

 

Add: Decrease in Current Assets

 

 

 

Stock

8,000

 

 

Add: Increase in Current Liabilities

 

 

 

Bills Payable

12,000

 

 

Cash Generated from Operations

22,000

 

 

Less: Tax Paid

 

 

Net Cash Flow from Operating Activities

 

22,000

 

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

 

Sale of Fixed Assets

30,000

 

 

Net Cash Flows from Investing Activities

 

30,000

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Repayment of Long-Term Loan

(50,000)

 

 

Net Cash Used in Financing Activities

 

(50,000)

 

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

2,000

 

 

Add: Cash and Cash Equivalent in the beginning of the period

 

15,000

 

Cash and Cash Equivalents at the end of the period

 

17,000

 

 

 

 

 

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 (1,83,000 – 82,000)

1,01,000

 

 

Profit Before Taxation

1,01,000

 

 

Items to be Added:

 

 

 

Interest on Debentures

7,500

 

 

Operating Profit before Working Capital Adjustments

1,08,500

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(56,000)

 

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

40,000

 

 

Less: Decrease in Current Liabilities

 

 

 

Other Current Liabilities

(8,000)

 

 

Add: Decrease in Current Assets

 

 

 

Trade Receivables

38,000

 

 

Cash Generated from Operations

1,22,500

 

 

Less: Tax Paid

 

 

Net Cash Flows from Operating Activities

 

1,22,500

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Fixed Assets

(1,57,000)

 

 

Purchase of Investments

(13,000)

 

 

Net Cash Used in Investing Activities

 

(1,70,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Share Capital

50,000

 

 

Proceeds from Issue of 15% Debentures

30,000

 

 

Interest on Debentures (50,000 × 15%)

(7,500)

 

 

Net Cash Flow from Financing Activities

 

72,500

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

25,000

 

Add: Cash and Cash Equivalent in the beginning of the period

 

70,000

 

Cash and Cash Equivalents at the end of the period

 

95,000

 

 

 

 

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



Page No 5.94:

Question 41:

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 (1,83,000 – 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.

Answer:

Cash Flow Statement

for the year ended March 31, 2013

 

Particulars

Amount

(Rs)

Amount

(Rs)

A

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss (58,000 – 50,000)

8,000

 

 

Profit Before Taxation

8,000

 

 

Items to be Added:

 

 

 

Goodwill Written-off

15,000

 

 

Share Issue Expenses Written-off

3,000

 

 

Operating Profit before Working Capital Adjustments

26,000

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(80,000)

 

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

23,000

 

 

Add: Decrease in Current Assets

 

 

 

Trade Receivables

23,000

 

 

Cash Generated from Operations

(8,000)

 

 

Less: Tax Paid

 

 

Net Cash Used in Operating Activities

 

(8,000)

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Plant

(1,24,000)

 

 

Net Cash Used in Investing Activities

 

(1,24,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Share Capital

1,00,000

 

 

Repayment of Long-term Borrowings

(30,000)

 

 

Net Cash Flow from Financing Activities

 

70,000

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(62,000)

 

Add: Cash and Cash Equivalent in the beginning of the period

 

80,000

 

Cash and Cash Equivalents at the end of the period

 

18,000

 

 

 

 

 



Page No 5.95:

Question 42:

Cash Flow Statement

for the year ended March 31, 2013

 

Particulars

Amount

(Rs)

Amount

(Rs)

A

Cash Flow from Operating Activities

 

 

 

Profit as per Statement of Profit and Loss (58,000 – 50,000)

8,000

 

 

Profit Before Taxation

8,000

 

 

Items to be Added:

 

 

 

Goodwill Written-off

15,000

 

 

Share Issue Expenses Written-off

3,000

 

 

Operating Profit before Working Capital Adjustments

26,000

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(80,000)

 

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

23,000

 

 

Add: Decrease in Current Assets

 

 

 

Trade Receivables

23,000

 

 

Cash Generated from Operations

(8,000)

 

 

Less: Tax Paid

 

 

Net Cash Used in Operating Activities

 

(8,000)

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Plant

(1,24,000)

 

 

Net Cash Used in Investing Activities

 

(1,24,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Share Capital

1,00,000

 

 

Repayment of Long-term Borrowings

(30,000)

 

 

Net Cash Flow from Financing Activities

 

70,000

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(62,000)

 

Add: Cash and Cash Equivalent in the beginning of the period

 

80,000

 

Cash and Cash Equivalents at the end of the period

 

18,000

 

 

 

 

 

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 (1,25,000 – 20,000)

1,05,000

 

 

Proposed Dividend

28,000

 

 

Provision for Taxation

15,000

 

 

Profit Before Taxation

1,48,000

 

 

Items to be Added:

 

 

 

Depreciation

16,000

 

 

Operating Profit before Working Capital Adjustments

1,64,000

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(22,000)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(34,000)

 

 

Add: Decrease in Current Assets

 

 

 

Bills Receivables

15,000

 

 

Prepaid Expenses

2,000

 

 

Trade Receivables

9,000

 

 

Cash Generated from Operations

1,34,000

 

 

Less: Tax Paid

(10,000)

 

 

Net Cash Flow from Operating Activities

 

1,24,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Fixed Assets

(1,55,000)

 

 

Net Cash Used in Investing Activities

 

(1,55,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Mortgage Loan

25,000

 

 

Dividend Paid

(20,000)

 

 

Net Cash Flow from Financing Activities

 

5,000

 

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(26,000)

 

Add: Cash and Cash Equivalent in the beginning of the period

 

59,000

 

Cash and Cash Equivalents at the end of the period

 

33,000

 

 

 

 

 



Page No 5.96:

Question 43:

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 (1,25,000 – 20,000)

1,05,000

 

 

Proposed Dividend

28,000

 

 

Provision for Taxation

15,000

 

 

Profit Before Taxation

1,48,000

 

 

Items to be Added:

 

 

 

Depreciation

16,000

 

 

Operating Profit before Working Capital Adjustments

1,64,000

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(22,000)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(34,000)

 

 

Add: Decrease in Current Assets

 

 

 

Bills Receivables

15,000

 

 

Prepaid Expenses

2,000

 

 

Trade Receivables

9,000

 

 

Cash Generated from Operations

1,34,000

 

 

Less: Tax Paid

(10,000)

 

 

Net Cash Flow from Operating Activities

 

1,24,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Fixed Assets

(1,55,000)

 

 

Net Cash Used in Investing Activities

 

(1,55,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Mortgage Loan

25,000

 

 

Dividend Paid

(20,000)

 

 

Net Cash Flow from Financing Activities

 

5,000

 

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(26,000)

 

Add: Cash and Cash Equivalent in the beginning of the period

 

59,000

 

Cash and Cash Equivalents at the end of the period

 

33,000

 

 

 

 

 

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 (80,000 – 30,000)

50,000

 

 

Proposed Dividend

30,000

 

 

Provision for Taxation

15,000

 

 

Profit Before Taxation

95,000

 

 

Items to be Added:

 

 

 

Depreciation

10,000

 

 

Operating Profit before Working Capital Adjustments

1,05,000

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(40,000)

 

 

Debtors

(36,000)

 

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

44,000

 

 

Add: Decrease in Current Assets

 

 

 

Bills Receivable

4,000

 

 

Cash Generated from Operations

77,000

 

 

Less: Tax Paid

(12,000)

 

 

Net Cash Flow from Operating Activities

 

65,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Sale of Plant and Machinery

50,000

 

 

Net Cash Flow from Investing Activities

 

50,000

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Repayment of 10% Loan

(75,000)

 

 

Dividend Paid

(20,000)

 

 

Net Cash Used in Financing Activities

 

(95,000)

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

20,000

 

Add: Cash and Cash Equivalent in the beginning of the period (5,000 – 37,000)

 

(32,000)

 

Cash and Cash Equivalents at the end of the period (13,000 – 25,000)

 

(12,000)

 

 

 

 

Note: It has been assumed that 10% loan is repaid in the beginning of the accounting period, therefore, no interest on loan is provided.



Page No 5.97:

Question 44:

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 (80,000 – 30,000)

50,000

 

 

Proposed Dividend

30,000

 

 

Provision for Taxation

15,000

 

 

Profit Before Taxation

95,000

 

 

Items to be Added:

 

 

 

Depreciation

10,000

 

 

Operating Profit before Working Capital Adjustments

1,05,000

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(40,000)

 

 

Debtors

(36,000)

 

 

Add: Increase in Current Liabilities

 

 

 

Trade Payables

44,000

 

 

Add: Decrease in Current Assets

 

 

 

Bills Receivable

4,000

 

 

Cash Generated from Operations

77,000

 

 

Less: Tax Paid

(12,000)

 

 

Net Cash Flow from Operating Activities

 

65,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Sale of Plant and Machinery

50,000

 

 

Net Cash Flow from Investing Activities

 

50,000

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Repayment of 10% Loan

(75,000)

 

 

Dividend Paid

(20,000)

 

 

Net Cash Used in Financing Activities

 

(95,000)

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

20,000

 

Add: Cash and Cash Equivalent in the beginning of the period (5,000 – 37,000)

 

(32,000)

 

Cash and Cash Equivalents at the end of the period (13,000 – 25,000)

 

(12,000)

 

 

 

 

Note: It has been assumed that 10% loan is repaid in the beginning of the accounting period, therefore, no interest on loan is provided.

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 (17,000 – 15,000)

2,000

 

  12% Preference Share Dividend 6,000  

 

Transfer to General Reserve

20,000

 

 

Profit Before Taxation

28,000

 

 

Items to be Added:

 

 

 

Depreciation on Plant

30,000

 

 

Depreciation on Building

50,000

 

 

Goodwill Written-off

10,000

 

 

Operating Profit before Working Capital Adjustments

1,18,000

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(2,000)

 

 

Trade Receivables

(40,000)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(18,000)

 

 

Cash Generated from Operations

58,000

 

 

Less: Tax Paid

 

 

Net Cash Flow from Operating Activities

 

58,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Land and Building

(30,000)

 

 

Purchase of Plant

(60,000)

 

 

Net Cash Used in Investing Activities

 

(90,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Share Capital

50,000

 

  12% Preference Share Dividend (6,000)  

 

Redemption of 12% Preference Share Capital

(10,000)

 

 

Net Cash Flow from Financing Activities

 

34,000

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

2,000

 

Add: Cash and Cash Equivalent in the beginning of the period

 

15,000

 

Cash and Cash Equivalents at the end of the period

 

17,000

 

 

 

 

Working Notes:

WN1

Building Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

1,00,000

Depreciation A/c

50,000

Bank A/c (Purchase- Bal. Fig.)

30,000

Balance c/d

80,000

 

1,30,000

 

1,30,000

 

 

 

 

 

WN2

Plant Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

40,000

Depreciation A/c

30,000

Bank A/c (Purchase- Bal. Fig.)

60,000

Balance c/d

70,000

 

1,00,000

 

1,00,000

 

 

 

 


Notes:

1. It is assumed that preference shares are redeemed at year end, since the date of redemption is not mentioned.
2. The answer as per book for the operating, investing and financing activity is different from the above solution. In the textbook answer, dividend on preference share capital has not been considered.

 

Page No 5.97:

Question 45:

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 (17,000 – 15,000)

2,000

 

  12% Preference Share Dividend 6,000  

 

Transfer to General Reserve

20,000

 

 

Profit Before Taxation

28,000

 

 

Items to be Added:

 

 

 

Depreciation on Plant

30,000

 

 

Depreciation on Building

50,000

 

 

Goodwill Written-off

10,000

 

 

Operating Profit before Working Capital Adjustments

1,18,000

 

 

Less: Increase in Current Assets

 

 

 

Inventories

(2,000)

 

 

Trade Receivables

(40,000)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(18,000)

 

 

Cash Generated from Operations

58,000

 

 

Less: Tax Paid

 

 

Net Cash Flow from Operating Activities

 

58,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Purchase of Land and Building

(30,000)

 

 

Purchase of Plant

(60,000)

 

 

Net Cash Used in Investing Activities

 

(90,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Equity Share Capital

50,000

 

  12% Preference Share Dividend (6,000)  

 

Redemption of 12% Preference Share Capital

(10,000)

 

 

Net Cash Flow from Financing Activities

 

34,000

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

2,000

 

Add: Cash and Cash Equivalent in the beginning of the period

 

15,000

 

Cash and Cash Equivalents at the end of the period

 

17,000

 

 

 

 

Working Notes:

WN1

Building Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

1,00,000

Depreciation A/c

50,000

Bank A/c (Purchase- Bal. Fig.)

30,000

Balance c/d

80,000

 

1,30,000

 

1,30,000

 

 

 

 

 

WN2

Plant Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

40,000

Depreciation A/c

30,000

Bank A/c (Purchase- Bal. Fig.)

60,000

Balance c/d

70,000

 

1,00,000

 

1,00,000

 

 

 

 


Notes:

1. It is assumed that preference shares are redeemed at year end, since the date of redemption is not mentioned.
2. The answer as per book for the operating, investing and financing activity is different from the above solution. In the textbook answer, dividend on preference share capital has not been considered.

 

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 (1,50,000 – 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 or Decrease 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

(Rs)

Particulars

Amount

(Rs)

Balance b/d

15,00,000

Bank A/c (Sale)

6,000

Bank A/c (Purchase- Bal. Fig.)

5,20,000

Profit and Loss A/c (Loss on Sale)

14,000

 

 

Balance c/d

20,00,000

 

20,20,000

 

20,20,000

 

 

 

 

 



Page No 5.98:

Question 46:

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 (1,50,000 – 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 or Decrease 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

(Rs)

Particulars

Amount

(Rs)

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

 

 

 

 

 

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 (1,10,000 – 85,000)

25,000

 

 

Proposed Dividend

60,000

 

 

Profit Before Taxation

85,000

 

 

Items to be Added:

 

 

 

Depreciation

70,000

 

 

Loss on Sale of Fixed Assets

15,000

 

 

Operating Profit before Working Capital Adjustments

1,70,000

 

 

Less: Increase in Current Assets

 

 

 

Bills Receivables

(30,000)

 

 

Inventories

(25,000)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(15,000)

 

 

Add: Decrease in Current Assets

 

 

 

Debtors

20,000

 

 

Cash Generated from Operations

1,20,000

 

 

Less: Tax Paid

 

 

Net Cash Flows from Operating Activities

 

1,20,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Sale of Fixed Assets

30,000

 

 

Purchase of Fixed Assets

(2,10,000)

 

 

Net Cash Used in Investing Activities

 

(1,80,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Share Capital

1,00,000

 

 

Repayment of Bank Loan

(25,000)

 

 

Dividend Paid

(45,000)

 

 

Net Cash Flow from Financing Activities

 

30,000

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(30,000)

 

Add: Cash and Cash Equivalent in the beginning of the period

 

30,000

 

Cash and Cash Equivalents at the end of the period

 

 

 

 

 

Working Notes:

Fixed Assets Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

4,00,000

Bank A/c (Sale)

30,000

Bank A/c (Purchase- Bal. Fig.)

2,10,000

Accumulated Depreciation

15,000

 

 

Profit and Loss A/c (Loss on Sale)

15,000

 

 

Balance c/d

5,50,000

 

6,10,000

 

6,10,000

 

 

 

 

 

Accumulated Depreciation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Fixed Assets A/c

15,000

Balance b/d

80,000

Balance c/d

1,35,000

Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)

70,000

 

1,50,000

 

1,50,000

 

 

 

 

 



Page No 5.99:

Question 47:

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 (1,10,000 – 85,000)

25,000

 

 

Proposed Dividend

60,000

 

 

Profit Before Taxation

85,000

 

 

Items to be Added:

 

 

 

Depreciation

70,000

 

 

Loss on Sale of Fixed Assets

15,000

 

 

Operating Profit before Working Capital Adjustments

1,70,000

 

 

Less: Increase in Current Assets

 

 

 

Bills Receivables

(30,000)

 

 

Inventories

(25,000)

 

 

Less: Decrease in Current Liabilities

 

 

 

Trade Payables

(15,000)

 

 

Add: Decrease in Current Assets

 

 

 

Debtors

20,000

 

 

Cash Generated from Operations

1,20,000

 

 

Less: Tax Paid

 

 

Net Cash Flows from Operating Activities

 

1,20,000

 

 

 

 

B

Cash Flow from Investing Activities

 

 

 

Sale of Fixed Assets

30,000

 

 

Purchase of Fixed Assets

(2,10,000)

 

 

Net Cash Used in Investing Activities

 

(1,80,000)

 

 

 

 

C

Cash Flow from Financing Activities

 

 

 

Proceeds from Issue of Share Capital

1,00,000

 

 

Repayment of Bank Loan

(25,000)

 

 

Dividend Paid

(45,000)

 

 

Net Cash Flow from Financing Activities

 

30,000

 

 

 

 

D

Net Increase or Decrease in Cash and Cash Equivalents

 

(30,000)

 

Add: Cash and Cash Equivalent in the beginning of the period

 

30,000

 

Cash and Cash Equivalents at the end of the period

 

 

 

 

 

Working Notes:

Fixed Assets Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Balance b/d

4,00,000

Bank A/c (Sale)

30,000

Bank A/c (Purchase- Bal. Fig.)

2,10,000

Accumulated Depreciation

15,000

 

 

Profit and Loss A/c (Loss on Sale)

15,000

 

 

Balance c/d

5,50,000

 

6,10,000

 

6,10,000

 

 

 

 

 

Accumulated Depreciation Account

Dr.

Cr.

Particulars

Amount

(Rs)

Particulars

Amount

(Rs)

Fixed Assets A/c

15,000

Balance b/d

80,000

Balance c/d

1,35,000

Profit and Loss A/c (Dep. charged during the year- Bal. Fig.)

70,000

 

1,50,000

 

1,50,000

 

 

 

 

 

Answer:

Cash Flow Statement

for the year ended March 31, 2012

 

Particulars

Amount

(Rs)

Amount

(Rs)

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 or Decrease 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

 

 

 

 

 



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