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18

INTERMEDIATE (IPC) EXAMINATION: MAY, 2016

Working Note
Calculation of Dividend distribution tax
Particulars
(i)

Grossing-up of dividend
Dividend distributed by Ring Ltd. 25% of 4,00,000

1,00,000

Add: Increase for the purpose of grossing up of dividend

[1,00,000 x (15/(100-15)]

17,647

Gross dividend
(ii)
2.

1,17,647
20,358

Dividend distribution tax @ 17.304% of ` 1,17,647

Cash Flow Statement of Priya Ltd.
for the year ended 31 st March, 2015

A. Cash flow from Operating Activities

Net profit before tax (` 54,000 ` 40,000 + ` 60,000)
Add: Adjustment for depreciation (W.N.1)

74,000
24,000
14,400

Interest on debentures (` 1,60,000 x 9%)

Loss on sale of machinery (W.N.2)

4,000
1,16,400

Less: Profit on redemption of debentures (Non

Operating Income)

(1,600)
1,14,800
(30,000)

Less :Income tax paid

Operating profit before changes in Working Capital
Add: Increase in outstanding expenses
18,000
Decrease in trade receivables
Less: Decrease in trade payables
Increase in inventory
Increase in prepaid expenses

80,000

84,800
98,000
1,82,800

14,000
28,000
2,000

(44,000)

Net cash from operating activities

B. Cash flow from Investing Activities
Sale of old machinery

1,38,800
10,000

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