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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

CASH FLOW STATEMENT(AS 3 Revised)


MEANING OF CASH FLOW AND CASH FLOW STATEMENT:-Balance Sheet (or Position Statement) and
Statement of Profit and Loss (or Income Statement) of a company do not give information about inflows
and outflows of cash during an accounting period. It is Cash Flow Statement which gives information of
Cash Flow of an enterprise.

Cash Flow Statement is a statement that shows the flow of Cash and Cash Equivalents during the period
under report. Cash Flows are inflows (i.e., receipts) and outflows (i.e., payments) of Cash and Cash
Equivalents. Transactions that increase Cash and Cash Equivalents are inflows of Cash and Cash
Equivalents and transactions that decrease Cash and Cash Equivalents are outflows of Cash and Cash
Equivalents. Cash and Cash Equivalents include Cash, Bank Balance, Marketable Securities, etc. Unless
specified otherwise, Current Investments are considered as Marketable Securities. Hence, are included
in Cash and Cash Equivalents.

Examples of Cash Flows :

Cash Inflows Cash Outflows


 Cash Sales  Cash Purchases
 Cash Received against Trade Receivables  Cash Paid against Trade Payables
 Cash Received for Commission and Royalty  Operating Expenses paid (e.g.,
 Insurance Claim Received Administration Expenses, Selling and
Distribution Expenses)
 Cash Received from Sale of Investment  Cash Purchase of Investment
(Other than Marketable Securities) (Other than Marketable Securities)
 Cash Received from Sale of Fixed Assets  Cash Purchase of Fixed Assets
 Cash Received from Sale of Securities  Loans and Advances Given
 Loans and Advances Received  Payment for Buy-back of Equity Shares
 Proceeds from Issue of Equity Shares  Payment for Redemption of Preference
 Proceeds from Issue of Preference Shares Shares
 Proceeds from Issue of Debentures  Payment for Redemption of Debentures

Cash Flow Statement is prepared according to the Accounting Standard-3 (Revised). The accounting
standard prescribes that Cash Flow Statement be prepared showing cash flow under three heads,
namely:

1. Cash Flow from Operating Activities;

2. Cash Flow from Investing Activities; and

3. Cash Flow from Financing Activities.

OBJECTIVES OF CASH FLOW STATEMENT :- The objectives of Cash Flow Statement are:

• To determine the sources (receipts) of Cash and Cash Equivalents under operating, investing and
financing activities of the enterprise.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

• To determine applications (payments) of Cash and Cash Equivalents under operating, investing and
financing activities of the enterprise.

• To determine net change in Cash and Cash Equivalents being the difference between sources
(receipts) and applications (payments) under operating, investing and financing activities between the
dates of two Balance Sheets.

IMPORTANCE OR USES OF CASH FLOW STATEMENT

(i) Short-term Planning: Cash Flow Statement gives information about sources and applications
of Cash and Cash Equivalents for a specific period. It helps in planning investments and
assessing the financial requirements of the enterprise.
(ii) Cash Flow Helps in Assessing Liquidity and Solvency: Solvency is the ability of the
enterprise to meet its liabilities on time. Cash Flow Statement helps to assess liquidity.
(iii) Efficient Cash Management: Cash Flow Statement gives information relating to surplus or
deficit of cash. An enterprise, therefore, can decide about the Short-term Investments of the
surplus and can arrange the Short-term Credit in case of deficit.
(iv) Comparative Study: A comparison of the actual cash flows with the budgeted cash flows of
the year shows the extent to which Cash and Cash Equivalents were generated and applied
as per the plan.
(v) Reasons for Cash Position: Cash Flow Statement shows the reasons for lower and higher
cash balances with the enterprise. Sometimes, an enterprise has lower cash balance in spite
of higher profits or has higher cash balance in spite of lower profits. Reasons for such
situations can be analysed with the help of Cash Flow Statement.
(vi) Evaluate Management Decisions: Cash Flow Statement, by providing information relating to
company's investing and financing activities, gives the investors and creditors information
about cash flow which helps them to evaluate management decisions.
(vii) Dividend Decision: Dividend payable is deposited in a separate Bank Account upon it being
declared (i.e., interim dividend) or approved (i.e., final dividend). Cash Flow Statement helps
in deciding how much dividend should be paid.

LIMITATIONS OF CASH FLOW STATEMENT :-The limitations of Cash Flow Statement are:

(1) Non-cash Transactions are not Shown: Cash Flow Statement shows only inflows and outflows of
cash. It does not show non-cash transactions like the purchase of building by issue of shares or
debentures to the vendors or issue of bonus shares.
(2) Not a Substitute for an Income Statement: Income Statement shows net income of the
enterprise based on accrual basis of accounting whereas Cash Flow Statement shows only cash
inflows or outflows which does not represent net profit earned or loss incurred by the
enterprise.
(3) Not a Substitute for Balance Sheet: It is not a substitute for Balance Sheet (Position Statement)
because it does not show the financial position (i.e., Equity, Liabilities and Assets).
(4) Historical in Nature: It rearranges available information in the Income statement (Statement of
Profit and Loss) and the Balance Sheet. Thus, it is historical in nature.
(5) Assessment of Liquidity: Liquidity of the enterprise cannot be determined from Cash Flow
Statement alone because it depends on other factors also like current assets and current
liabilities. Cash and Cash Equivalents is one of the components of current assets.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

(vi) Accuracy of cash Flow Statement: It is prepared from the financial statements. If financial
statements are prepared incorrectly, Cash Flow Statement will also be incorrect.

KEY TERMS USED IN CASH FLOW STATEMENT

Meaning of cash :- Cash comprises of Cash on Hand and demand deposits with banks.

Meaning of cash equivalents:Cash Equivalents are short-term, highly liquid investments that are readily
convertible into the known amount of cash and which are subject to an insignificant change in value. An
investment normally qualifies as cash equivalent only when it has a short maturity of say, three months
or less from the date of acquisition

Note:- Current Investments, unless specified otherwise, are taken as Marketable Securities and
included in Cash and Cash Equivalents.

Examples of Cash Equivalents are Current Investments, Treasury Bills, Commercial Papers and these
have insignificant risk of change in its value, etc.

Cash and Cash Equivalents is calculated as:


Cash on Hand
Add: Cash at Bank
Add: Cheques and Drafts on Hand
Add: Short-term Investments (Marketable Securities)
Add: Short-term Deposits in Banks
Classification of Cash Flows :- Accounting Standard-3 (Revised) requires that the changes resulting in
inflows and outflows of Cash and Cash Equivalents be classified into three activities, i.e., Operating,
Investing and Financing. These are discussed below:

(i) Operating Activities :- Operating Activities are the principal revenue producing activities of
the enterprise and other activities that are not Investing or Financing Activities. Cash Flow
from operating Activities being principal revenue producing activity of enterprise, generally
results from the business transactions and events that determine net profit or loss.Examples of
Cash Flow from Operating Activities are:

For Non-financial Companies


(a) Receipts from sale of goods and/or rendering of services;
(b) Receipts from royalties, fees and commission, etc.;
(c) Receipts from Trade Receivables (i.e., Debtors and Bills Receivable);
(d) Payment for purchase of goods and/or services;
(e) Payment to Trade Payables (i.e., Creditors and Bills Payable);
(f) Payment of wages, salaries and other payments to employees;
(g) Receipts of premium and payment of claims (for an Insurance Company);
(h) Payment of and refund of income tax unless these are identified with investing or financing activities.

For Financial Companies:


(a) Payment for purchase of securities;
(b) Payment of interest on loans;
(c) Receipts from sale of securities;
(d) Dividend received on securities;

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

(e) Interest received on loans granted;


(f) Payment of salaries, bonus, etc. to employees;
(g) Payment of and refund of income tax unless these are identified with investing or financing activities.
The net effect of Cash Flow from Operating Activities is shown in Cash Flow Statement as Cash Flow from (or Used
in) Operating Activities.
Meaning of Principal Revenue Producing Activities:- Principal revenue producing activities mean business
activities being carried out by the enterprise to earn profit. For example:
(i)For a computer manufacturing company, manufacturing and selling of computers is its principal revenue
producing activity.
(ii)For a trading company, purchase and sale of goods is its principal revenue producing activity.
(iii)For a finance company, giving and taking loans, dealing in securities is its principal revenue producing activity.
(iv)For an insurance company, receipt of premiums and payment of claims, annuities, etc., is its principal revenue
producing activity.
(ii) Investing Activities are the acquisition and disposal of the Long-term Assets and Other
Investments, not included in cash equivalents. These activities include transactions involving purchase and
sale of the Long-term Assets, which are not held for resale such as machinery, land and building, investments, etc.
Investments include investments that are not included in Cash and Cash Equivalents such as current investments
other than marketable securities. Investments include investment made in long-term investments and other
investments by the enterprise with a purpose to generate income and thus, cash flow.

Examples of Cash Flow from Investing Activities are:

(a) Payments for purchase of fixed assets (including intangible assets).


(b) Receipts from disposal of fixed assets (including intangible assets).
(c) Payments to purchase (acquire) securities, i.e., shares, warrants, debentures, bonds or debt instruments of
other enterprises. (In the case of Non-financial companies).
(d) Receipts from sale (disposal) of securities, i.e., shares, warrants, debentures, bonds or debt instruments of
other enterprises. (In the case of Non-financial Companies).
(e) Advances and loans made to third parties (other than advances and loans made by a financial enterprise).
(f) Receipts from repayments of advances and loans made to third parties (other than advances and loans made
by financial enterprise).

(iii) Financing Activities :- Financing Activities are the activities which result in change in size and
composition of owner's capital (including Preference Share Capital in the case of a company) and
borrowings of the enterprise from other sources. Thus, increase in share capital (both equity and
preference), redemption of preference shares, issue of debentures, increase in borrowings (short-term
and long-term), repayment of borrowings (short-term and long-term) and redemption of debentures,
etc., are shown under Financing Activity. Examples of Cash Flow from Financing Activities are:

(a) Proceeds from the issue of shares or other similar instruments.


(b) Proceeds from the Issue of Debentures, Loans, Bonds and other Short-term Borrowings.
(c) Payment for Buy-back of Equity Shares.
(d) Repayments of the amounts borrowed including redemption of debentures.
(e) Payments of dividends both on Equity and Preference Shares.
(f) Payments for Interest on Debentures and Loans (Short-term and Long-term).
(g) Increase or decrease in Bank Overdraft and Cash Credit.

Question 1.From the following details relating to the Accounts of Grow More Ltd. prepare Cash Flow
Statement:

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

31.3.2002 31.3.2001
(Rs.) (Rs.)
Liabilities:
Share Capital 10,00,000 9,00,000
Reserve 2,00,000 1,50,000
Profit and Loss Account 1,00,000 60,000
Debentures 2,00,000
Provision for taxation 1,00,000 70,000
Sundry Creditors 9,00,000 8,20,000
25,00,000 20,00,000
Assets:
Plant and Machinery 7,00,000 5,00,000
Land/Building 6,00,000 4,00,000
Investments 1,00,000
Sundry Debtors 5,00,000 7,00,000
Stock 4,00,000 2,00,000
Cash on hand/bank 2,00,000 2,00,000
25,00,000 20,00,000
Adjustment:- Dividend proposed during last year and current year Rs 1,00,000 and Rs 1,20,000
respectively.

Question 2. Identify which of the following transactions are classified or shown as Operating, investing
or financing Activity:

(i) Cash received against sale of goods. (ii) Cash paid for purchases of goods.

(iii) Payment of salaries and wages. (iv) Payment of interest on loan.

(v) Repayment of loan. (vi)Purchase of machinery against payment.

(vii) Sale of car in cash. (viii) Dividend paid.

(ix) Commission received. (x) Cash received from trade receivables.

(xi)Cash proceeds from sale of fixed asset.

(xii) Cash paid for purchase of Stock-in-Trade. (xii) Debentures purchased.

(xiii) Loan advanced. (xvi) Purchase of Patents.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question3. State a transaction that is always classified or shown as an Operating Activity.

Solution: Payments of Employees' Salaries, bonus, gratuity, etc., are always shown as Operating
Activity.

Question4. Identify out of the following transactions that are classified or shown as Investing Activity:

(i) Cash proceeds from sale of fixed asset.(ii) Debentures purchased.


(iii) Loan advanced. (vi) Purchase of Patents.

Question5. Identify out of the following transactions that are shown as Financing Activity:

(i) Repayment of Loan taken.


(ii) Proceeds from Issue of Shares.

(iii) Debentures issued by the company.

(iv) Redemption of Preference Shares.

(v) Interest paid.

(vi) Dividend paid.

(vii) Increase in Bank Overdraft or Cash Credit.

(viii) Issue of bonus shares.

Question 6. State a transaction that is always classified as a Financing Activity along with the reason for
such classification.

Solution: Payment of dividends is always classified as a Financing Activity because it is a payment


relating to share capital, which is a Financing Activity.

Question7. Give a transaction, a part of which is shown as an Investing Activity and another part as a
Financing Activity.

Solution: Payment of instalments under Hire-purchase System. The instalment has two components,
Principal and interest. Principal is shown as an Investing Activity and interest as a Financing Activity.

Transactions not regarded as Cash Flow

Transactions that are movement in between the items of Cash and Cash Equivalents are not regarded as
Cash Flow because the balance (Opening and Closing) of Cash and Cash Equivalents is the net result of
Cash Flow under Operating, Investing and Financing Activities. For example, cash deposited into bank is
not Cash Flow because Cash-in-Hand is reduced on deposit into bank but bank balance is increased.
Both Cash and Bank are items of Cash and Cash Equivalents. Other examples are cash withdrawn from
bank and purchase and sale of marketable securities.

Non-cash Transactions :- Non-cash Transactions are those transactions in which flow (inflow or
outflow) of Cash and Cash Equivalent does not take place. For example, Depreciation and Amortization
Expenses, Issue of Bonus Shares and Issue of Equity Shares or Debentures for consideration other than
cash (say, for purchase of assets), etc.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Non-cash transactions are not considered while preparing Cash Flow Statement.

Question 8. Identify the following transactions belonging to (1) Operating Activities, (2) Investing
Activities, (3) Financing Activities, and (4) Cash and Cash equivalent:

1. Cash Sales; 2. Cash Purchase

3. Rent Paid; 4. Cash-in-Hand;

5. Income Tax Paid; 6. Office Expenses;

7. Balance at Bank; 8. Sale of Machines by a dealer of Machines

9. Issue of Debentures; 10. Dividend Paid;

11. Cash Paid against Trade Payables; 12. Purchase of Machines;

13. Income Tax Refund Received; 14. Issue of Share Capital;

15. Sale of Patents; 16. Purchase of Marketable Securities;

17. Purchase of Goodwill; 18. Short-term Deposits in Banks

19. Purchase of Securities (Non-marketable); 20. Cash Received from Debtors.

Question 9. Identify which of the following transactions are (i) Operating Activities (ii) Investing
Activities, (iii) Financing Activities, and (iv) Cash and Cash Equivalents:

1. Marketing Expenses; 2. Purchase of Investments

3. Cash Received from Trade Receivables; 4. Buy-back of Equity Shares;

5. Repayment of a Long-term Loan; 6. Commission Received

7. Selling and Distribution Expenses; 8. Redemption of Debentures;

9. Sale of Marketable Securities; 10. Bank Overdraft/Cash Credit.

Question 10. Identify which of the following transactions are (i) Operating Activities, (ii) Investing
Activities (iii) Financing Activities, and (iv) Cash and Cash Equivalents:

1. Sale of Investments;

2. Dividend received on Shares;

3. Interest received on Investments;

4. Rent received by a Real Estate Company;

5. Rent received by a Company whose main Business is Manufacturing

6. Interest paid on Debentures or long-term loan;

7. Marketable Securities;

8. Proceeds from Shares issued; and

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

9. Interest paid on Bank Overdraft.

Question 11. Classify the following transactions as Operating Activities for (i) Financial Enterprise, and
(ii) Non-financial Enterprise:
(a) Purchase of securities of a company;
(b) Brokerage paid for the above purchases;
(c) Sale of securities of a company;
(d) Dividend and interest received on securities;
(e) Dividend paid to shareholders;
(f) Interest paid on borrowings;
(g) Loans and advances made; and
(h) Receipt of loans and advances made.
Give reasons for your answer.
Solution: (i) Financial Enterprise: All the transactions except (e), i.e., Dividend paid to shareholders shall be
classified or shown as Operating Activities. It is so because Purchase and Sale of Securities and also Borrowings and
Advancing Loans are the principal revenue producing activities of a financial enterprise.

Dividend paid to shareholders shall be classified as Financing Activity because it is related to the transactions that
change the size and composition of owners' capital.

(ii) Non financial Enterprise: All the transactions except (e) and (f) (i.e., Dividend paid to shareholders and Interest
paid on borrowings respectively) shall be classified as Investing Activities because these are not the principal
revenue producing activities of the enterprise.

Transactions (e) and (f) shall be classified as Financing Activities because these are related to activities that change
the size and composition of the owners' capital and borrowings.

Question 12. State which of the following would result in inflow/outflow/no flow of Cash and Cash
Equivalents:

(i)Sale of fixed assets (Book value Rs 50,000) at a loss of Rs 5,000;


(ii) Purchase of Stock-in-Trade for cash;
(iii)Purchase of fixed assets by issue of shares;
(iv)Cash received from debtors Rs 10,000;
(v) Cash deposited into Bank;
(vi) Cash withdrawn from Bank;
(vii)Issue of fully paid bonus shares;
(viii)Sale of marketable securities for cash at par;
(ix)Declaration of final dividend Rs 25,000;
(x) Writing off bad debts against the provision for doubtful debts;
(xi) Declaration of Interim Dividend;
(xii)Sale of Current Investments;
(xiii)Increase in Bank Overdraft; and
(xiv)Decrease in Cash Credit.
Solution: STATEMENT SHOWING THE EFFECT OF TRANSACTIONS ON CASH AND CASH EQUIVALENTS

Transaction Effect on Cash and Cash Equivalents Reason


(i) Inflow Cash is increased by the amount of Rs 45,000.
(ii) Outflow Cash is decreased by the amount of Stock-in-Trade.
(iii) No Flow Cash is not transacted.
(iv) Inflow Cash is increased by Rs 10,000.
(v) No Flow It is a movement between two components of Cash and

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Cash Equivalents.
(vi) No Flow It is a movement between two components of Cash and
Cash Equivalents.
(vii) No Flow Cash is not affected. It is capitalization of profits.
(viii) No Flow Cash which includes marketable securities also is not
affected.
(ix) No Flow Cash is not affected because final dividend declared will
be paid in the next year, if approved by shareholders.
(x) No Flow Cash is not affected.
(xi) Outflow Interim dividend declared is paid within 7 days of
declaration.
(xii) No Flow Current Investments are part of Cash and Cash
Equivalents.
(xiii) Inflow Short-term Borrowing has increased.

(xiv) Outflow Short-term Borrowing has decreased.

NOTE:- Extraordinary Items: Extraordinary items are incomes and expenses that arise from events or
transactions that are clearly distinct from the ordinary activities of the enterprise and, therefore, are not
expected to recur frequently or regularly. Examples of Extraordinary items are:
a. Operating Activities: Compensation paid to employees under Voluntary Retirement Scheme.
b. Investing Activities: Claim received against damage of fixed assets say because of earthquake.
c. Financing Activities: Payment for buy-back of Shares

ACCOUNTING OF PROPOSED DIVIDUND:- AS 4, Contingencies and Events Occurring After the Balance Sheet
Date prescribes that Proposed Dividend should by accounted as liability after it has been declared, i.e., approved
by the shareholders. However, it should he disclosed in the Notes to Accounts ants attached to the financial
statements.

Therefore, Proposed Dividend is not shown as Short-term Provision in the Balance Sheet but is disclosed in the
Notes to Accounts. After it is approved by the shareholders in their meeting which is held after closure of
accounting year, i.e., in the next year, it is accounted as a liability and is paid.

The effect of this on Cash Flow Statement is as follows:

(I) Proposed Dividend for previous year is shown as outflow of cash assuming that the shareholders have
approved the proposed dividend as was recommended.
(II) No effect is given to Proposed Dividend for the current year as it is not provided. When such dividend is
declared (approved) in the AGM, entry is passed debiting 'Surplus, i.e., Balance in Statement of Profit and
Loss Account' and Crediting 'Dividend Payable Account' and thereafter such declared dividend is paid. Net
Dividend paid (i.e., Proposed and Approved Dividend less Dividend still payable) is shown as Cash Used in
Financing Activity.

Note: Unless otherwise stated, it is presumed that the dividend proposed for the previous year has been declared
at the AGM in the Current Year at the proposed amount and has also been paid during the Current Year.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question13. Following is the extract from the Balance Sheets of KBC Ltd.:

Equity and Liabilities 31st March, 31st March,


2019 (Rs) 2018 (Rs)
Surplus, i.e., Balance in Statement of Profit and Loss 8,00,000 5,00,000
Dividend Payable 30,000 …
Dividend Proposed for the year ended 31st March, 2018 was Rs 3,00,000 and for the current year Rs
3,50,000.Prepare the Note to show Net Profit before Tax and Extraordinary Items.

Question14. Following is the extract from the Balance Sheets of Z Ltd.:

Liabilities 31st March, 31st March,


2018 (Rs) 2017 (Rs)
Equity Share Capital 5,00,000 5,00,000
10% Redeemable Preference Share Capital 5,00,000 5,00,000
Surplus, i.e., Balance in Statement of Profit and Loss 4,50,000 2,50,000

Additional Information:

(a) Proposed equity dividends for the years ended 31st March, 2017 and 2018 were Rs 1,50,000 and Rs 1,00,000
respectively.
(b) An Interim Dividend of Rs 50,000 on Equity Shares was paid on 31st December, 2017.
Show Net Profit before Tax and Extraordinary Items.

Question15. From the following information relating to year ended 31st March, 2019 calculate Net Profit before
Tax and Extraordinary Activities:

Particulars Rs
surplus, i.e., Balance in Statement of Profit and Loss (Opening) 2,00,000
Surplus, i.e., Balance in Statement of Profit and Loss (Closing) 6,72,000
Transfer to Debentures Redemption Reserve 2,00,000
Proposed Dividend for the Previous Year ended 31st March, 2018 1,80,000
Interim Dividend paid during the year 1,44,000
Provision for Tax made during the Current Year 2,00,000
Income Tax Paid 2,16,000

Question16. From the following information for the year ended 31st March, 2017, calculate Net Profit before Tax
and Extraordinary Activities:
Particulars Rs
Surplus, i.e., Balance in Statement of Profit and Loss (Opening) (2,00,000)
Surplus, i.e., Balance in Statement of Profit and Loss (Closing) 5,40,000
Proposed Dividend for the year ended 31st March, 2017 3,15,000
Proposed Dividend for the year ended 31st March, 2016 2,10,000
Transfer to Workmen Compensation Reserve 1,50,000
Provision for Tax made during the Current Year 2,30,000

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question17.Prepare cash flow statement from the following Balance Sheet of Mamma Ltd. as at 31.3.2019:

Particulars Note No. 31st March, 31st March,


2019 (Rs) 2018 (Rs)
1.EQUITY AND LIABILITIES

1. Shareholder’s Funds
(a) Shares capital 1 8,00,000 8,00,000
(b) Reserves and surplus 2 6,95,000 5,20,000

2. Non-Current Liabilities
Long-term Borrowing 5,00,000 5,00,000

3. Current Liabilities

(a) Trade payables 60,000 50,000


(b) Other Current liabilities 1,00,000 75,000
(c) Short-term provisions 3 1,50,000 1,00,000
Total

23,05,000 20,45,000
1. ASSETS

1. Non-current Assets
(a) Fixed Assets 18,40,000 15,55,000
(b) Non-current investments 3,00,000 3,00,000
2 Current Assets 1,65,000 1,90,000
Total
23,05,000 20,45,000

Notes to Accounts

Particulars 31st march,2018 31st march,2018


(Rs) (Rs)
1. Share Capital
Equity shares Capital 5,00,000 5,00,000
Preference share Capital 3,00,000 3,00,000
8,00,000 8,00,000

2. Reserves and surplus


General Reserve 2,75,000 2,10,000
Workmen Compensation Reserve 2,50,000 2,00,000
Surplus, i.e., Balance in Statement of Profit and Loss 1,70,000 1,10,000
6,95,000 5,20,000
3. Short-term Provisions
Provision for Tax
1,50,000 1,00,000

Note; proposed Dividend for the years ended 31st March, 2019 and 2018 are Rs.1,60,000 and Rs.80,000
respectively.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question 18. . Calculate Net Profit before Tax and Extraordinary Items from the following Balance Sheet
of COC Ltd.

Surplus (opening balance) Rs 50,000


Surplus (closing balance) Rs 1,18,000
Dividend paid( proposed dividend for the previous year) Rs 36,000
Interim dividend paid during the year Rs 45,000
Transfer to reserve Rs 50,000
Provision for tax made during the current year Rs 75,000
Refund of tax Rs 1500
Loss of inventory due to fire Rs 1,00,000
Insurance claim received for above loss Rs 50,000

Question19. . Calculate Net Profit before Tax and Extraordinary Items from the following Balance Sheet
of COC Ltd.

Surplus (opening balance) Rs (100,000)


Surplus (closing balance) Rs 3,36,000
Dividend paid( proposed dividend for the previous year) Rs 72,000
Interim dividend paid during the year Rs 90,000
Transfer to reserve Rs 100,000
Provision for tax made during the current year Rs 1,50,000
Refund of tax Rs 3000
Loss of inventory due to fire Rs 2,00,000
Insurance claim received for above loss Rs 100,000

Question20.from the following information, calculate operating profit before working capital changes:
Net profit before tax and extraordinary items Rs 2,23,500
Depreciation Rs 42,000
Interest on borrowings Rs 8,400
Goodwill amortised Rs 9,300
Loss on sale of machinery Rs 9,000
Premium on redemption of debentures Rs 3,000
Interest and dividend received on investments Rs 13,800
Profit on sale of investments Rs 6000

Question 21. Calculate Cash Flow from Operating Activities from the following details:

Particulars 31st March 31st March


2019 (Rs) 2018 (Rs)
Surplus, i.e., Balance in Statement of Profit and Loss 3,00,000 2,00,000
Bills Receivable 1,80,000 1,40,000
Accumulated Depreciation 3,20,000 3,00,000
Outstanding Rent 40,000 16,000
Prepaid Insurance 12,000 14,000
Goodwill 1,60,000 2,00,000
Inventories (Stock) 1,80,000 1,40,000

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question22. Compute Cash Flow from Operating Activities from the following information:

Particulars 31st March, 31st March,


2018 (Rs) 2017 (Rs)
Surplus, i.e., Balance in Statement of Profit and Loss 1,10,000 1,20,000
Trade Receivables 50,000 62,000
Outstanding Rent 24,000 42,000
Goodwill 80,000 76,000
Prepaid Insurance 8,000 4,000
Trade Payables 26,000 38,000

Solution: CASH FLOW FROM OPERATING ACTIVITIES

Particulars Rs
Net Loss (As per Working Note 1) (10,000)
Add: Decrease in Current Assets:
Trade Receivables 12,000
2,000
Less: Increase in Current Assets and Decrease in Current Liabilities:
Prepaid Insurance 4,000
Outstanding Rent 18,000
Trade Payables 12,000 (34,000)
CASH USED IN OPERATING ACTIVITIES
(32,000)

Question 23. Compute Cash Flow from Operating Activities from the following Information:

Particulars Rs
Net Profit after Provision for Tax and Proposed Dividend 1,10,000
Provision for Tax 50,000
Proposed Dividend (Last Year) approved by shareholders in AGM 50,000
Depreciation 20,000
Loss on Sale of Plant 10,000
Goodwill Amortised 40,000
Gain on Sale of Land 40,000
Income Tax Paid 50,000

Question24. Calculate Cash Flow from Operating Activities from the following:

(i) Profit for the year before tax and after considering the following items is Rs 2,50,000.

Particulars Rs
Depreciation on Fixed Assets 1,00,000
Amortization of Goodwill 50,000
Transfer General Reserve 70,000
Gain (Profit) on Sale of Land 30,000

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

(ii) Following is the position of current assets and current liabilities:

Particulars Closing Opening


Balance (Rs) Balance (Rs)
Trade Receivables 2,30,000 2,20,000
Trade Payables 1,00,000 1,50,000
Prepaid Expenses 40,000 60,000

Question25. Sunshine Ltd. reported Net Profit after Tax of Rs 3,40,000 for the year ended 31st March,
2018. The extracts from Balance Sheets for 31st March, 2018 and 2017 are:

Particulars 31st March, 31st March


2018 (Rs) 2017 (Rs)
Inventories 69,000 72,000
Trade Receivable 94,000 61,000
Prepaid Expenses 14,000 3,000
Trade Payables 82,000 78,000
Provision for Tax 13,000 19,000
Depreciation charged on plant and machinery Rs 49,000, insurance claim received Rs 20,000 and gain on
sale of investments of Rs 8,000 appeared in the Statement of Profit and Loss for the year ended 31st
March, 2018. Calculate Cash Flow from Operating Activities.

Question26. X Ltd. earned profit of Rs 5,00,000 after charging Depreciation of Rs 1,00,000 on assets and
a transfer to General Reserve of Rs 1,50,000. Goodwill amortised was Rs 35,000 and gain on sale of
Machinery was Rs 15,000.

Additional Information: At the end of the year, Debtors showed an increase of Rs 30,000; creditors an
increase of Rs 50,000; Prepaid Expenses an increase of Rs 1,000; Bills Receivable a decrease of Rs
15,000; Bills Payable a decrease of Rs 20,000 and outstanding expenses a decrease of Rs 10,000.
Determine the Cash Flow from Operating Activities.

Solution: CASH FLOW FROM OPERATING ACTIVITIES

Particulars (Rs)

Net Profit before Tax 6,50,000


Add: Non-cash Expenses:
Depreciation 1,00,000
Goodwill Amortised35,000 1,35,000
7,85,000
15,000
Less: Gain on Sale of Machinery 7,70,000
Operating Profit before Working Capital Changes
Add: Decrease in Current Assets and Increase in Current Liabilities:
Bills Receivable 15,000 65,000

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Creditors 50,000 8,35,000


Less: Increase in Current Assets and Decrease in Current Liabilities:
Debtors 30,000
Prepaid Expenses 1,000
Bills Payable 20,000
Outstanding Expenses 10,000 61,000
Cash Flow from Operating Activities 7,74,000

Question27. The following is the Statement of Profit and Loss of Yamuna Ltd.:

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

Particulars (Rs)
I.Revenue from Operations 10,00,000
II.Expenses:
(a) Cost of Materials Consumed 50,000
(b) Purchase of Stock-in-Trade 5,00,000
(c) Other Expenses 3,00,000
Total Expenses 8,50,000
III.Profit before Tax (I-II) 1,50,000

Additional Information:
1. Trade Receivables decrease by 30,000 during the year.
2. Prepaid expenses increase by 5,000 during the year.
3. Trade Payables increase by 15,000 during the year.
4. Outstanding Expenses increased by 3,000 during the year.
5. Other expenses included depreciation of 25,000.
Compute Cash Flow from Operating Activities for the year ended 31st March, 2019. (NCERT, Modified)

Question 28. From the following information. Calculate Cash Flow from Operating Activities:

Statement of Profit and loss for the year ended 31st march 2019
Particular Note No Rs
l Revenue from Operation (Net Sales) 19,20,000
ll. Other Income 1 28,800
lll. Total Revenue (1+II) 19,48,000
lV. Expenses:
(a) Purchase of Stock-in-Trade 11,90,400
(b) Change in Inventories of Stock-in-Trade 49,600
(c) Depreciation and Amortization Expenses 48,000
(d) Other Expenses 2 4,75,200
Total Expenses 17,63,200
V. Profit before Tax (lll-IV) 1,85,600
VI. Less: Tax 57,600
VII. Profit after Tax 1,28,000

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Notes to Accounts

Particular Rs.
1. Other Income
(l) Gain on sale of furniture 24,000
(ll) Interest 4,800
28,800
2. Other expenses
(l) Selling and Distribution Expenses 1,04,000
(ll) Office Expenses 2,40,000
(lll) Loss on Sale of Machinery 1,31,200
4,75,200
Additional Information:

Particular 31st March,2019 (Rs) 31st March, 2018 (Rs)


Trade Receivables 2,62,000 2,24,000
Inventories 1,34,400 1,84,000
Trade Payables 1,20,000 1,00,000
Outstanding Expenses 3,200 5,600

Question29. From the following particulars calculate Cash Flow Operating Activities

Particulars 31st March 2019 (Rs) 31st March 2018 (Rs)


General Reserve 1,50,000 1,00,000
Surplus i.e. balance in statement of profit and loss 70,000 (60,000)
10% Debentures 3,10,000 2,10,000
Trade Payables 11,75,000 75,000
Cash and Cash Equivalents 1,30,000 90,000
Goodwill 80,000 1,00,000
Machinery 4,60,000 5,00,000
10% Non-current Investments 1,60,000 60,000
Inventories 2,45,000 60,000
Provision for Doubtful debts 1,50,000 1,00,000
Trade Receivables 21,00,000 10,00,000
Discount of Issue of Debentures ---- 10,000

Question30.Calculate Cash Flow from Operating Activities from the following information:

Particulars Opening Balance Closing Balance


Rs Rs
Surplus, i.e., Balance in Statement of Profit and Loss 30,000 35,000
General Reserve 10,000 15,000
Provision for Depreciation on Plant 30,000 35,000
Outstanding Expenses 5,000 3,000
Goodwill 20,000 10,000
Trade Receivables (Sundry Debtors) 40,000 35,000

An item of plant costing Rs 20,000 having book value of Rs 14,000 was sold for Rs 18,000 during the year.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question31. From the following information, calculate Cash Flow from Operating Activities:
STATEMENT OF PROFIT AND LOSS for the year ended 31st March, 2018

Particulars Note No. Rs


I. Revenue from Operations (Net Sales) 16,00,000
II. Expenses:
(a) Purchase of Stock-in-Trade 15,00,000
(b) Change in Inventories of Stock-in-Trade 1 (25,000)
(c) Employees Benefit Expenses 1,50,000
(d) Depreciation and Amortisation Expenses 1,00,000
(e) Other Expenses 40,000
Total Expenses 17,65,000
III. Net Profit before tax (I – Il) (1,65,000)
IV. Less: Provision for Tax (50,000)
V. Profit after Tax (III - IV) (2,15,000)
Note to Accounts

Particulars Rs
1. Change in Inventories of Stock-In-Trade
Opening Inventories 1,10,000
Less: Closing Inventories 1 35,000
(25000)

Additional Information:

Particulars 31st March 2018 31st March 2017


Sundry Debtors 1,50,000 1,25,000
Bills Receivable 30,000 40,000
Sundry Creditors 75,000 85,000
Salaries Outstanding 15,000 10,000
Prepaid Insurance 27,500 25,000
Provision for Tax 10,000 15,000

Question 32. X Ltd. has Machinery written down value of which on 1st April, 2018 was 8,60,000 and on 31st
March, 2019 was 9,50,000. Depreciation for the year was 40,000, In the beginning of the year, a part of machinery
was sold for Rs 25,000 which had a written down value of 20,000. Calculate Cash Flow from Investing Activities .

Question33. From the following information, calculate Cash Flow from Investing Activities:

Particulars Closing Opening


Balances Balances
Machinery (At cost) 4,20,000 4,00,000
Accumulated Depreciation 1,10,000 1,00,000
Patents 1,60,000 2,80,000

Additional Information
1. During the year, a machine costing Rs 40,000 with its accumulated depreciation of Rs 24,000 was sold for
20,000.
2. Patents written off were Rs 40,000 and some patents were sold at a profit of Rs 20,000.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question34. From the following information, determine Cash Flow from Investing Activities of X Ltd.:

Particulars 31st March, 31st March,


2019 2018
1. Investments 5,00,000 2,50,000
2. Fixed Assets 11,90,000 8,75,000
Additional Information:

I. Half of the investments held in the beginning of the year were sold at 10% gain (profit).
II. Depreciation on Fixed Assets was Rs 1,00,000 for the year.
III. Interest received on investments Rs 35,000.
IV. Dividend received on investments Rs 25,000.

Question 35. From the following particulars, determine Cash Flow from Investing Activities:

Purchases (Rs) Sales (Rs)

Investments 1,80,000 1,00,000

Goodwill 2,00,000 …

Machinery 4,40,000 1,50,000

Patents … 1,00,000
A. Interest received on Debentures held as an investment Rs 16,000.
B. Dividend received on Shares held as an investment Rs 20,000.
C.A plot of land was purchased out of surplus funds for investment purposes and was let out for commercial use.
Rent received was Rs 80,000.
Question 36. A company had the following balances: -

Particulars Rs
Investments in the beginning of the period 34,000
Investments at the end of the period 28,000
During the year, the company sold 40% of its investments held in the beginning of period at a profit of
Rs 8,400 Determine Cash Flow from Investing Activities .

Question 37. From the following information, determine Cash Flow from Investing Activities:

Liabilities 31stMarch 31stMarch Assets 31stMarch 31stMarch


2018 2017 2018 2017
Provision for Depreciation Goodwill 1,00,000 1,20,000
on Furniture 30,000 10,000 Patents 1,20,000 1,00,000
Land 1,80,000 2,00,000
Plant and Machinery 3,20,000 3,60,000
(Net)
Furniture (Gross) 2,55,000 25,000
10% Investments 1,80,000 2,00,000
Accrued Interest on 10%
Investments 10,000 …

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

1. during the year, some land was sold at profit of Rs 10,000.

2. during the year, a part of furniture costing Rs 24,000( book value Rs 13,000) sold for Rs 6,000.

3. total depreciation charged on plant and machinery during the year Rs 50,000.

4. a part of machine costing Rs 70,000( book value Rs 39,000) sold at loss of Rs 9,000.

5. Investments were sold at profit of 10% on 1st April 2017.

Question 38. From the following Balance Sheet G. Ltd as at 31st march 2019 and the additional information,
prepare Cash Flow statement:

Particulars Note no 31st march 31st march 2018


2019
Equity and liabilities
1. Shareholders' Funds
(a) Share Capital 6,00,000 5,00,000
(b) Reserves and Surplus 1 8,50,000 7,00,000
2. Current Liabilities 4,10,000 3,55,000
Total 18,60,000 15,55,000
II. ASSETS
1. Non-Current Assets
(0) Fixed Assets—Tangible Assets 2 15,00,000 13,00,000
(b) Non-current Investments 1,00,000 50,000
2. Current Assets
( a) Trade Receivables 3 2,00,000 1,80,000
(b) Cash and Cash Equivalents 60,000 25,000
Total 18,60,000 15,55,000

Notes to Accounts

Particulars 31st march 2019 31st march 2018

1. Reserve and surplus


Surplus 2,50,000 2,00,000
General reserve 6,00,000 5,00,000
8,50,000 7,00,000

2. Fixed Assets—Tangible 8,00,000 6,00,000


Plant and Machinery (Net) 7,00,000 7,00,000
Land and Building (Net) 15,00,000 13,00,000

3. Trade Receivables
Sundry Debtors 1,20,000 1,10,000
Bills Receivable 80,000 70,000
2,00,000 1,80,000

Additional Information: During the year, the company sold machinery at book value for 2,00,000.

Question39. From the following information, determine Cash Flow from Financing Activities:

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Particulars 31st March, 2019 31st March, 2018


Equity Share Capital 5,00,000 4,00,000
10% Debentures 1,00,000 1,50,000
Securities Premium Reserve 50,000 40,000
Bank Overdraft 2,00,000 1,50,000
Interest on Bank Overdraft 15,000 10,000
Additional Information: Interest paid on debentures 10,000.

Question40. XYZ Ltd. provides the following information. Determine Cash Flow from Financing Activities:

Particulars 31st March 2018 31st March 2017


Equity Share Capital 15,00,000 10,00,000
10% Debentures … 1,00,000
8% Debentures 2,00,000 ----
Additional Information:
1. Interest paid on Debentures Rs 10,000.
2. Dividend paid Rs 50,000.
3. During the year 2017-18, XYZ Ltd. issued bonus shares in the ratio of 2 : 1 by capitalising reserve.

Question41. Following is the extract from Balance Sheets as at 31st March, 2019 of a company.

Current Year (Rs) Previous Year(Rs)

Equity Share Capital 9,00,000 7,00,000

12% Preference Share Capital 3,00,000 5,50,000

Securities Premium Reserve 1,40,000 1,00,000

12% Debentures 4,00,000 3,00,000

Additional Information:

1. Interim dividend on Equity Shares at the end of current year was paid @ 15%.

2. Dividend on Preference Shares was paid.

3. Preference Shares were redeemed at a premiums of 5% on 31st March, 2019.

4. Fresh shares and debentures were issued on the last date of current year. Determine Cash Flow from
Financing Activities.

Question42. From the following information, determine Cash Flow from Investing Activities and
Financing Activities:

Particulars Opening Closing


Balances Balances
Furniture (At cost) 20,000 28,000
Accumulated Depreciation on Furniture 6,000 9,000
Share Capital 1,00,000 1,40,000
Loan from Bank 25,000 15,000

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Additional information: During the year, furniture costing Rs 4,000 was sold at a gain (profit) of Rs
3,000. Depreciation on furniture charged during the year amounted to Rs 5,000.

Solution: CASH FLOW FROM FINANCING ACTIVITIES

Particulars Rs
Proceeds from Issue of Share Capital (Given) (Rs 1,40,000 -Rs 1,00,000) 40,000
Repayment of Bank Loan (Given) (Rs15,000 -Rs 25,000) (10,000)
Cash Flow from Financing Activities 30,000
CASH FLOW FROM INVESTING ACTIVITIES

Particulars Rs
Proceeds from Sale of Furniture (WN 3) 5,000
Payment for Purchase of Furniture (WN 1) 12,000
Cash Used in Investing Activities (WN 4) 7,000
Working Note: FURNITURE ACCOUNT

Particulars Rs Particulars Rs
To Balance b/d 20,000 By Bank A/c (WN 3) 5,000
To Gain (Profit) on Sale of 3,000 By Accumulated Depreciation A/c
Furniture A/c (Statement of Profit By Balance c/d 2,000
and Loss) 28,000
To Bank A/c (Balancing Figure)
(Furniture Purchased) 12,000
35,000 35,000

ACCUMULATED DEPRECIATION ACCOUNT

Particulars Rs Particulars Rs
To Furniture A/c (Balancing 2,000 By Balance b/d 6,000
Figure) By Depreciation A/c 5,000
(Accumulated depreciation
on furniture sold)
To Balance c/d 9,000
11,000 11,000

NOTE:- Share Issue Expenses and Underwriting Commission Paid:Share Issue Expenses: Share Issue
Expenses are shown as outflow under Financing Activity, it being related to Share Capital.

Underwriting Commission: Underwriting is an agreement where by the underwriters undertake to


subscribe unsubscribed shares and/or debentures offered to the public. For undertaking to subscribe
the unsubscribed shares and/or debenture, the underwriters charge commission usually calculated on
the issue price of debentures of underwriting commission is shown as an Outflow of Cash under
Financing Activities.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question 43. From the following information, calculate Cash Flow from Financing Activities.

Particulars 31st March 2019 31st march 2018


(Rs) (Rs)
Equity Share Capital 20,00,000 15,00,000
12% Preference Share Capital … 5,00,000
14% Debentures 2,50,000 …
Additional Information:

(i) Equity Shares were issued at a premium of 20%.


(ii) 12% Preference Shares were redeemed at par.
(iii) 14% Debentures were issued at a discount of 10%
(iv) Interim dividend paid on Equity Shares 1,50,000.
(v) Interest paid on 14% Debentures 35,000.
(vi) Underwriting Commission on Equity Shares Rs 20,000
(vii) Dividend paid on Preference Shares 60,000.

Preparation of cash flow statement without adjustments


Question 44. From the following information, prepare Cash Flow Statement for the year ended 31st
March, 2018:

Particulars Rs
Opening Cash Balance 10,000
Closing Cash Balance 12,000
Decrease in Trade Receivables 5,000
Increase in Trade Payables 7,000
Sale of Fixed Assets 20,000
Redemption of Debentures 50,000
Net Profit for the year before Tax 20,000

Solution: CASH FLOW STATEMENT for the year ended 31st March, 2018

Particulars Rs
(A) Cash Flow from Operating Activities
Net Profit for the year before Tax 20,000
Add: Increase in Trade Payables 7,000
Decrease in Trade Receivables 5,000 12,000
Cash Flow from Operating Activities 32,000
(B) Cash Flow from Investing Activities
Proceeds from Sale of Fixed Assets 20,000
Cash Flow from Investing Activities
(C) Cash Flow from Financing Activities
Redemption of Debentures (50,000)
(D) Net Increase in Cash and Cash Equivalents (A + B + C) 2,000
Add: Cash and Cash Equivalents in the beginning of the year 10,000
(E) Cash and Cash Equivalents at the end of the year 12,000

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question 45. Following is the Balance Sheet of X Ltd. as at 31st March, 2018:

Particulars Note no 31st march 31st march


2018 2017
I EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 25,00,000 20,00,000
(b) Reserves and Surplus 1 2,30,000 1,00,000
2. Current Liabilities
Trade Payables 4,50,000 7,00,000
Total 31,80,000 28,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets—Tangible Assets (Land) 6,60,000 5,00,000
2. Current Assets
(a) Inventories 9,00,000 8,00,000
(b) Trade Receivables 11,50,000 12,00,000
(c) Cash and Cash Equivalents 4,70,000 3,00,000
Total 31,80,000 28,00,000
Note to Accounts:

Particulars 31st March 2018 31st March 2017


1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss 2,30,000 1,00,000
Prepare Cash Flow Statement.

Question 46. Prepare Cash Flow Statement from the Balance Sheet of Nirmal Baba Ltd. as at 31.3.2018:

Particulars Note No 31st March, 31st March,


2018 2017
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 2,10,000 1,80,000
(b) Reserves and Surplus 1 1,32,000 24,000
2. Non-Current Liabilities
Long-term Borrowings 1,50,000 1,50,000
3. Current Liabilities
Trade Payables 75,000 27,000
Total 5,67,000 3,81,000
IL ASSETS
1. Non-Current Assets
(a) Fixed Assets:
Tangible Assets 2,94,000 2,52,000
(b) Non-Current Investments 48,000 18,000
2. Current Assets
(a) Current-Investments (Marketable) 54,000 60,000
(b) Inventories 1,07,000 24,000
(c) Trade Receivables 40,000 17,500
(d) Cash and Cash Equivalents 24,000 9,500
Total 5,67,000 3,81,000

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Note to Accounts

Particulars 31st March, 31st March,


2018 2017
1. Reserves and Surplus
Surplus, I.e., Balance In Statement of Profit and Loss 1,32,000 24,000

Preparation of Cash Flow Statement with Adjustments

Question 47. Balance Sheet of ABC Ltd. as at 31st March, 2018 is as follows:
Particulars Note No 31st March, 31st March,
2018 2017
EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 2,00,000 2,00,000
(b) Reserves and Surplus:
Surplus, i.e., Balance in Statement of Profit and Loss 98,000 96,000
2. Non-Current Liabilities
Long-term Borrowings 1 90,000 60,000
3. Current Liabilities
Trade Payables 82,000 72,000
Total 4,70,000 4,28,000
II ASSETS
1. Non-Current Assets
Fixed Assets (Tangible) 2 3,42,000 3,00,000
2. Current Assets
(a) Inventories 44,000 50,000
(b) Trade Receivables 76,800 70,000
(c) Cash and Cash Equivalents 7,200 8,000
Total 4,70,000 4,28,000
Notes to Accounts:

Particulars 31st March, 31st March,


2018 2017
Long-term Borrowings
Loan from Z Ltd. 40,000 ---
Loan from Bank 50,000 60,000
90,000 60,000
2, Fixed Assets (Tangible)
(i) Land 60,000 40,000
(ii) Building 1,10,000 1,00,000
(iii) Machinery 2,44,000 2,14,000
Less: Accumulated Depreciation 72,000 54,000 1,72,000 1,60,000
3,42,000 1,00,000
Add. information:During the year Rs 52,000 were paid as interim dividend. Prepare Cash Flow Statement.

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Question 48. From the following information, calculate Cash Flow from Operating Activities and Investing Activities:

Particulars 31st March, 31st March,


2017 2018
Surplus, i.e., Balance in Statement of Profit and Loss 2,50,000 10,00,000
Provision for Tax 75,000 75,000
Trade Payables 1,00,000 3,75,000
Current Assets (Trade Receivables and Inventories) 11,50,000 13,00,000
Fixed Assets (Tangible) 21,25,000 23,30,000
Accumulated Depreciation 10,62,500 11,00,000
Additional Information:
(i) A machine having book value of Rs 1,00,000 (Depreciation provided thereon Rs 1,62,500) was sold at a
loss of Rs20,000.
(ii) Tax paid during the year Rs 75,000.

Question 49. You are required to prepare a Cash Flow Statement (as per AS-3) for the year ended 31st March,
2019 from the following Balance Sheet as at 31st March, 2019: ABC Ltd.

BALANCE SHEET as or 31st March, 2019


Particulars Note 31st March, 31st March,
No 2019 2018
I, EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital (Equity Share Capital) 6,00,000 4,00,000
(b) Reserves Surplus (Statement of Profit and Loss) 2,00,000 1,00,000
2. Non-Current Liabilities
Long-term Borrowings 1,00,000 2,00,000
3. Current Liabilities
(a) Short-term Borrowings (Bank Loan) ... 10,000
(b) Trade Payables (Creditors) 45,000 60,000
(c) Short-term Provisions 1 70,000 40,000
Total 10,15,000 8,10,000
II ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(I) Tangible (Building) 6,00,000 6,00,000
(ii) Intangible (Patents) 45,000 50,000
(b) Non-current Investments 75,000 ...
2. Current Assets
(a) Inventories 15,000 10,000
(b) Trade Receivables (Debtors) 1,95,000 1,20,000
(C) Cash and Cash Equivalents (Cash) 85,000 30,000
Total 10,15,000 8,10,000

Note to Accounts

Particulars 31st March, 31st March,


2019 2018
1. Short-term Provisions
Provision for Taxation 70,000 40,000

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12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Note: Dividend proposed for the year 2017-18 and 2018-19 are 60,000 and 80,000 respectively.

Additional Information: During the year 2018-19:

(i) Building costing 75,000 was purchased.


(ii) An old building, the book value of which was Rs 63,000, was sold at a loss of Rs 5,000.
(iii) Tax provided during the year was Rs 80,000.

Question 50. Following is the Balance Sheet of Wisben Ltd. As at 31st March 2012

Particulars Note 31st March 31stMarch


no. 2012 2011
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 7,00,000 6,00,000
(b) Reserves and Surplus 2,00,000 1,10,000
(Surplus, Le ., Balance in Statement of Profit and Loss)
1. Non-Current Liabilities
Long-term Borrowings 3,00,000 2,00,000
2. Current Liabilities
Trade Payables 30,000 25,000
Total 12,30,000 9,35,000
II, ASSETS
1. Non-Current Assets
Fixed Assets:
Tangible Assets 11,00,000 8,00,000
2. Current Assets
(a) Inventories 70,000 60,000
(b) Trade Receivables 32,000 40,000
(C) Cash and Cash Equivalents 28,000 35,000
Total 12,30,000 9,35,000

Additional Information: During the year a piece of machinery of the book value of 80,000 was sold for
65,000. Depreciation provided on tangible assets during the year amounted to Rs 2,00,000.

Prepare the Cash Flow Statement. (DELHI 2013)

Question51. Following is the Balance Sheet of K.K. Ltd. as at 31st March, 2015:

BALANCE SHEET as or 31st March,2015

Particulars Note No. 31st March, 31st March,


2015 2014
I. EQUITY AND LIABIUTIES
1. Shareholders' Funds
(a) Share Capital 10,00,000 8,00,000
(b) Reserves and Surplus 1 4,00,000 (1,00,000)
2. Non-Current Liabilities
Long-term Borrowings 2 9,00,000 10,00,000

pg. 26 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

3. Current Liabilities
(a) Short-term Borrowings 3 3,00,000 1,00,000
(b) Short-term Provisions 4 1,40,000 1,80,000
Total 27,40,000 19,80,000
II ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(I) Tangible Assets 5 20,06,000 14,40,000
(II) Intangible Assets 6 40,000 60,000
(b) Non-current Investments 2,00,000 1,50,000
2. Current Assets
(a) Current investments 1,00,000 1,20,000
(b) Inventories 7 2,14,000 90,000
(c) Cash and Cash Equivalents 1,80,000 1,20,000
Total 27,40,000 19,80,000
Notes to Accounts:

Particulars 31st March 31st march


2015 2014
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss 4,00,000 1,00,000
2. Long-term Borrowings
12% Debentures 9,00,000 10,00,000
3. Short-term Borrowings
Bank Overdraft 3,00,000 1,00,000
4. Short-term Provisions
Provision for Tax 1,40,000 1,80,000
5. Tangible Assets
Machinery 24,06,000 16,42,000
Less: Accumulated Depreciation 4,00,000 2,02,000
20,06,000 14,40,000
6. Intangible Assets
Goodwill 40,000 60,000
7. Inventories
Stock in Trade 2,14,000 90,000
Additional Information:

(i) 12% Debentures were redeemed on 31st March, 2015.


(ii) Tax 1,40,000 was paid during the year.

Prepare Cash Flow Statement.

Question52. Following is the Balance Sheet of R.S. Ltd. as at 31st March, 2016:

pg. 27 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

BALANCE SHEET as at 31st March, 2016

Particulars Note 31st March 31st March


No. 2016 2015
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 9,00,000 7,00,000
(b) Reserves and Surplus 2,50,000 1,00,000
2. Non-Current Liabilities
Long-term Borrowings 4,50,000 3,50,000
3. Current Liabilities
(a) Short-term Borrowings 1,50,000 75,000
(b) Short-term Provisions 2,00,000 1,25,000
Total 19,50,000 13,50,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(i) Tangible 14,65,000 9,15,000
(ii) Intangible 1,00,000 1,50,000
(b) Non-current Investments 1,50,000 1,00,000
2. Current Assets
(a)Current Investments 40,000 70,000
(b) Inventories 1,22,000 72,000
(c) Cash and Cash Equivalents 73,000 43,000
Total 19,50,000 13,50,000

Notes to Accounts

Particulars 31st March 31st March


2016 2015
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss 2,50,000 1,00,000
2. Long-term Borrowings
12% Debentures 4,50,000 3,50,000
3. Short-term Borrowings
Bank Overdraft 1,50,000 75,000
4. Short-term Provisions
Provision for Tax 2,00,000 1,25,000
5. Tangible Assets
Machinery 16,75,000 10,55,000
Accumulated Depreciation . 2,10,000 1,40,000
14,65,000 9,15,000
6. Intangible Assets
Goodwill 1,00,000 1,50,000
7. Inventories
Stock-in-Trade 1,22,000 72,000

pg. 28 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Additional Information:

(i) Rs 1,00,000, 12% Debentures were issued on 31st March, 2016.


(ii) During the year a piece of machinery costing Rs 80,000 on which accumulated depreciation
was Rs 40,000 was sold at a loss of Rs 10,000. Prepare a Cash Flow Statement. (delhi 2017,
modified)

Solution: CASH FLOW STATEMENT for the year ended 31st March, 2016

Particulars Rs Rs
I. Cash Flow from Operating Activities
Net Profit before Tax and Extraordinary Items (WN 1) 3,50,000
Add: Non-cash and Non-operating Charges:
Goodwill amortised 50,000
Depreciation on Machinery 1,10,000
Interest on Debentures (3,50,000 x 12/100) 42,000
Loss on Sale of Machinery 10,000
Operating Profit before Working Capital Changes 5,62,000
Less: Increase in Current Assets:
Inventories 50,000
Cash Generated from Operations 5,12,000
Less: Income Tax Paid (1,25,000)
Cash Flow from Operating Activities
II. Cash Flow from Investing Activities
Purchase of Machinery (WN 2) (7,00,000)
Sale of Machinery 30,000
Purchase of Non-current Investments (50,000)
Cash Used in Investing Activities (7,20,000)
III. Cash Flow from Financing Activities
Proceeds from Issue of Shares 2,00,000
Proceeds from Issue of 12% Debentures 1,00,000
Interest on Debentures Paid (42,000)
Bank overdraft (Raised) 75,000 3,33,000
Cash Flow from Financing Activities
IV. Net Increase in Cash and Cash Equivalents (I +II+ III) NILL
Add: Opening Balance of Cash and Cash Equivalents: 1,13,000
Current Investments and Cash and Cash Equivalents
Closing Balance of Cash and Cash Equivalents:
Current Investments and Cash and Cash Equivalents 1,13,000
Working Notes:

1. Calculation of Net Profit before Tax and Extraordinary items: 2,50,000


Closing Balance of Surplus, i.e., Balance in Statement of Profit and Loss 1,00,000
Less: Opening Balance of Surplus, i.e., Balance in Statement of Profit and Loss 1,50,000
Add: Provision for Tax 2,00,000

Net Profit before Tax and Extraordinary Items 3,50,000

pg. 29 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

MACHINERY ACCOUNT

Particulars Rs Particulars Rs
To Balance b/d 10,55,000 By Bank A/c 30,000
To Bank A/c (Purchase)—Balancing 7,00,000 By Loss on Sale of Machinery A/c 10,000
Figure (Statement of Profit and Loss)
By Accumulated Depreciation A/c 40,000
By Balance c/d 16,75,000
17,55,000 17,55,000
ACCUMULATED DEPRECIATION ACCOUNT Cr.

Particulars Rs Particulars Rs
To Machinery A/c 40,000 By Balance b/d 1,40,000
To Balance c/d 2,10,000 By Statement of Profit and Loss 1,10,000
(Depreciation)—Balancing Figure
2,50,000 2,50,000

Question53. From the following Balance Sheet of I Ltd. as at 31st March, 2018, prepare Cash Flow
Statement:

Particulars Note No 31st march 31st march


2018 2017
I. EQUITY ANDLIABILITIES
1. Shareholders ‘Funds
(a) Share Capital 1 4,50,000 4,50,000
(b) Reserves and Surplus 2 1,86,000 (12,000)
2. Non-Current Liabilities
Long-term Borrowings (8% Debentures) 1,56,000 90,000
3. Current Liabilities
(a) Short-term Borrowings (8% Bank Loan) 24,000 30,000
(b) Trade Payables 72,000 66,000
(c) Short-term Provisions 3 30,000 24,000
Total 9,18,000 6,48,000
II. ASSETS
1.Non-Current Assets
(a) Fixed Assets:
(I) Tangible Assets (Net) 5,16,000 3,72,000
(II) Intangible Assets (Goodwill) 9,000 24,000
(b) Non-current Investments 75,000 48,000
2. Current Assets
(a) Current Investments 3,000 9,000
(b) Inventories 1,17,000 60,000
(c) Trade Receivables 1,20,000 1,20,000
(d) Cash and Cash Equivalents 78,000 15,000
Total 9,18,000 6,48,000

pg. 30 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Notes to Accounts

Particulars 31st march 31st march


2018 2017
1. Share Capital
Equity Share Capital 3,30,000 2,70,000
Preference Share Capital 1,20,000 1,80,000
4,50,000 4,50,000
2. Reserves and Surplus
Securities Premium Reserve 6,000 ...
General Reserve 90,000 72,000
Surplus, i.e., Balance in Statement of Profit and Loss 90,000 (84,000)
1,86,000 (12,000)
3.
Short-term Provisions
Provision for Tax 30,000 24,000
Additional Information:

(i) During the year a piece of machinery costing 36,000 on which depreciation charged was 12,000
was sold for Rs 12,000. Depredation provided on Tangible Assets Rs 36,000.
(ii) Income Tax Rs 27,000 was provided.
(iii) Additional Debentures were issued at par on 1st October, 2017 and Bank Loan was repaid on
the same date.
(iv) The shareholders approved redemption of 10% Preference Shares of Rs 60,000 at a premium of
5% at their Annual General Meeting held on 20th September, 2017, although the terms of issue
did not provide for redemption at a premium. Accordingly, the shares were redeemed.

Question54. From the flowing Balance Sheet and information of XYZ Ltd , prepare Cash Flow Statement;

Particulars Note no 31st March 31st March


2018 2017
I.EQUITY AND LIABILITIES
Shareholders' Funds
(a) Share Capital 1 4,50,000 5,00,000
(b) Reserves and Surplus 2 2,55,000 1,00,000
2. Non-Current Liabilities
Long-term Borrowings: 10% Debentures 2,00,000 1,00,000
3. Current Liabilities
(a) Trade Payables 1,33,000 46,000
(b) Other Current Liabilities 3 5,000 10,000
(c) Short-term Provisions (Provision for Tax) 12,000 24,000
Total 10,55,000 7,80,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets (Tangible) 6,20,000 5,10,000
(b) 10% Investments 80,000 30,000
2. Current Assets
(a) Current Investments 10,000 8,000
(b) Inventories 90,000 1,00,000

pg. 31 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

(C) Trade Receivables 4 1,85,000 90,000


(d) Cash and Cash Equivalents 70,000 42,000
Total 10,55,000 7,80,000
Notes to Accounts

Particulars 31st March 31st March


2018 2017
1. Share Capital
Equity Share Capital 3,50,000 3,00,000
12% Preference Share Capital 1,00.000 2,00,000
4,50,000 5,00,000
2. Reserves and Surplus
Securities Premium Reserve 5,000 ...
Surplus, Le., Balance in Statement of Profit and Loss 2,50,000 1,00,000
2,55,000 1,00,000
3. Other Current Liabilities
Premium on Redemption of Preference Shares 5,000 10,000

4. Trade Receivables
Sundry Debtors 2,00,000 1,00,000
Less: Provision for Doubtful Debts 15,000 10,000
1,85,000 90,000
You are informed that during the year:
i. A machine with a book value of Rs 40,000 was sold for Rs 25,000

ii. Depreciation charged during the year was Rs 70,000.

iii. Preference shares were redeemed on 31st December 2017 at a premium of 5%.

Iv. An interim dividend @15% was paid on equity shares on 31st January 2018.

v. Dividend @ 12% was proposed on preference shares for the year ended on 31st March 2018 on Rs
1,00,000 and for the year ended on 31st march 2017 on Rs 2,00,000.

vi. Fresh equity shares were issued at a premium of 10% on 31st March 2018.

Question 55. Balance Sheet of XYZ Ltd. as at 31st March, 2019 is:

Particulars Note 31st march 31st march


no 2019 2018
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 4,50,000 4,50,000
(b) Reserves and Surplus 1 3,78,000 3,56,000
2. Non-Current Liabilities
Long-term Borrowings: Mortgage Loan 2,70,000 …
3. Current Liabilities
(a) Trade Payables 1,34,000 1,68,000
(b) Short-term Provisions: Provision for Tax 10,000 75,000
Total 12,42,000 10,49,000

pg. 32 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

II. ASSETS
1. Non-Current Assets
(a) Fixed Assets (Tangible) 3,20,000 4,00,000
(b) Non-current Investments 60,000 50,000
2. Current Assets
(a) Current Investments 17,000 19,000
(b) Inventories 2,10,000 2,40,000
(c) Trade Receivables 4,55,000 2,10,000
(d) Cash and Cash Equivalents 1,80,000 1,30,000
Total 12,42,000 10,49,000

Notes to Account

Particulars 31st march 2019 31st march 2018


1. Reserves and Surplus
General Reserve 3,10,000 3,00,000
Surplus, i.e., Balance in Statement of Profit and Loss 68,000 56,000
3,78,000 3,56,000
Additional Information:
1. Investments costing 8,000 were sold during the year for 8,500
2. Provision for tax made during the year was 9,000
3. During the year part of the fixed assets costing 10,000 was sold for 12,000 and the gain (profit) was included in
the statement profit and loss.
4. Interim Dividend paid during the year amounted to 40,000.
Prepare Cash Flow Statement.
Question56. Following is the BALANCE SHEET OF THERMAL POWER LTD, as at 31st March, 2014

BALANCE SHEET OF THERMAL POWER LTD, as at 31st March,2014

Particulars Note no 31st march 31st march


2014 2013
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 12,00,000 11,00,000
(b) Reserves and Surplus 1 3,00,000 2,00,000
2. Non-Current Liabilities
Long-term Borrowings 2,40,000 1,70,000
3. Current Liabilities
(a) Trade Payables 1,79,000 2,04,000
(b) Short-term Provisions 50,000 77,000
Total 19,69,000 17,51,000
II. ASSETS
1.Non-Current Assets
Fixed Assets:
(i) Tangible Assets 2 10,70,000 8,50,000
(ii) Intangible Assets 3 40,000 1,12,000
2. Current Assets
(a) Current Investments 2,40,000 1,50,000

pg. 33 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

(b) Inventories 1,29,000 1,21,000


(c) Trade Receivables 1,70,000 1,43,000
(d) Cash and Cash Equivalents 3,20,000 3,75,000
Total 19,69,000 17,51,000
Notes to Accounts

Particulars 31st March, 31st March,


2014 2013
1. Reserves and Surplus
Surplus, i.e., Balance in Statement of Profit and Loss 3,00,000 2,00,000
2. Tangible Assets
Machinery 12,70,000 10,00,000
Less: Accumulated Depreciation (2,00,000) (1,50,000)
10,70,000 8,50,000
3. Intangible Assets
Goodwill 40,000 1,12,000
Additional Information;

During the year a piece of machinery, costing 24,000 on which accumulated depreciation was Rs 16,000
was sold for 6,000.Prepare cash flow statement (DELHI 2015)

Question 57. From the following Balance Sheet of X Ltd. as at 31st March, 2018, prepare Cash Flow
Statement.

Particulars Note 31st march 31st march


no 2018 2017
1, EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 3,60,000 3,00,000
(b) Reserves and Surplus 2,00,000 1,60,000
(Surplus, i.e., Balance In Statement of Profit and Loss)
2. Non-Current Liabilities
Long-term Borrowings 1 3,78,000 2,62,000
3. Current Liabilities
(a) Trade Payables 2 28,000 28,000
(b) Other Current Liabilities (Outstanding Expenses) 2,000 6,000
Total 9,68,000 7,56,000
II. ASSETS
1. Non-Current Assets
Fixed Assets:
(i) Tangible Assets 3 6,40,000 4,60,000
(ii) Intangible Assets: Goodwill 10,000 20,000
2. Current Assets
(a) Inventories 34,000 40,000
(b) Trade Receivables 4 1,68,000 1,36,000
(c) Cash and Cash Equivalents:
Cash at Bank 1,16,000 1,00,000
Total 9,68,000 7,56,000

pg. 34 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Notes to Accounts

Particulars 31st March, 2018 31st March,2017


1. Long-term Borrowings
12% Debentures 1,38,000 1,02,000
12% Public Deposits 2,40,000 1,60,000
3,78,000 2,62,000
2. Trade Payables
Creditors 20,000 16,000
Bills Payable 8,000 12,000
28,000 28,000
3. Fixed Assets—Tangible
Building 4,40,000 3,00,000
Plant 2,00,000 1,60,000
6,40,000 4,60,000
4. Trade Receivables
Debtors 1,50,000 1,20,000
Bills Receivable 18,000 16,000
1,68,000 1,36,000
Additional Information:
1. Depreciation charged on Building Rs 20,000 and Plant Rs 10,000.
2. Debentures of Rs 36,000 were issued on 1st October,2017
3. Public Deposits of Rs 80,000 were taken on 31st March, 2018.

Question 58. From following Balance Sheet of Star Ltd. as at 31.3.2019, prepare cash flow statement.

Particulars Note no 31st 31st March


March2019 2018
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital 3,50,000 3,00,000
(b) Reserves and Surplus 1 70,000 50,000
2. Non-Current Liabilities
Long-term Borrowings (12% Debentures) 80,000 1,00,000
3. Current Liabilities
(a) Short-term Borrowings (Bank Loan) 15,000 25,000
(b) Trade Payables 1,65,000 60,000
Total 6,80,000 5,35,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets (Tangible) 2 4,10,000 3,00,000
(b) Non-Current Investments 40,000 50,000
2. Current Assets
(a) Inventories 52,000 30,000
(b) Trade Receivables 60,000 40,000
(c) Cash and Cash Equivalents 1,18,000 1,15,000
Total 6,80,000 5,35,000

pg. 35 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Notes to Accounts

Particulars 31st march 2019 31st march 2018


1. Reserves and Surplus
Capital Reserve 2,000 ...
General Reserve 33,000 20,000
Surplus, i.e., Balance in Statement of Profit and loss 35,000 30,000
70,000 50,000
2. Fixed Assets—Tangible
Machinery (Cost) 4,70,000 3,50,000
Less: Accumulated Depreciation 60,000 50,000
4,10,000 3,00,000
Additional Information;

(1) During the Year, Machinery costing 20,000 (acc. depreciation of 15,000) was sold for 12,000.
(2) During the year, Non-current Investments were sold at a profit of 20%, which transferred to Capital
Reserve.
(3) Debentures were redeemed at par on 1st April, 2018.
(4) Tax of 15,000 was paid during the year.
(5) Interim Dividend paid during the year amount to 25,000.

Question 59. From the following Balance Sheet Hullu Ltd. Prepare cash flow statement.

Particulars Note no 31st march 31st march


2018 2017
L EQUITY ANDLIABILITIES
1. Shareholders Funds
(a) Share Capital 15,00,000 10,00,000
(b) Reserves and Surplus 7,50,000 6,00,000
(Surplus, i.e., Balance in Statement of Profit and loss)
2. Non-Current Liabilities
Long-term Borrowings 1 1,00,000 2,00,000
3. Current Liabilities
(a) Trade Payables 2 1,00,000 1,10,000
(b) Short-term Provisions 95,000 80,000
Total 25,45,000 19,00,000
II ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(i) Tangible Assets 3 10,10,000 12,00,000
(ii) Intangible Assets: Goodwill 1,80,000 2,00,000
(b) Non-current Investment 6,00,000 ...
2. Current Assets
(a) Inventories 1,80,000 1,00,000
(b) Trade Receivables 2,00,000 1,50,000
(c) Cash and Cash Equivalents 4 3,75,000 3,40,000
Total 25,45,000 19,90,000

pg. 36 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142


12th class CASH FLOW STATEMENT Santosh kumar(CA/CMA)

Notes to Accounts

Particulars 31st March 31st March


2018 2017
1. Long-term Borrowings
2,000, 10% Debentures of Rs 100 each ... 2,00,000
Bank Loan 1,00,000 .............
1,00,000 2,00,000
2. Short-term Provisions
Provision for Tax 95,000 80,000
3. Tangible Assets
Land and Building 6,50,000 8,00,000
Plant and Machinery 3,60,000 4,00,000
10,10,000 12,00,000
4. Cash and Cash Equivalents
Cash in Hand 70,000 50,000
Bank Balance 3,05,000 2,90,000
3,75,000 3,40,000

Additional Information:

1. Contingent Liability: 31st March, 2018 31st March, 2017


Proposed Dividend 20% 15%

2. Income tax paid during the year includes 15,000 paid towards Distribution Tax.

3. Land and Building of book value 1,50,000 was sold at a profit of 10%.

4. The rate of depreciation on Plant and Machinery is 10%.

pg. 37 CONCEPTONLINECLASSES.COM Mob No. 9999631597, 9811455109, 8448322142

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