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Chapter 6 Cash Flow Statement Solutions

Question - 21 : - From the following information, prepare cash flow statement:

Particulars

Note No.

31st March
2015
(₹)

31st March
2014
(₹)

I) Equity and Liabilities

1. Shareholders’ Funds

a) Share capital

7,00,000

5,00,000

b) Reserves and surplus

4,70,000

2,50,000

2. Non-current Liabilities

(8% Debentures)

4,00,000

6,00,000

3. Current Liabilities

a) Trade payables

9,00,000

6,00,000

Total

24,70,000

19,50,000

II) Assets

1. Non-current assets

a) Fixed assets

i) Tangible

7,00,000

5,00,000

ii) Intangible-Goodwill

1,70,000

2,50,000

2. Current assets

a) Inventories

6,00,000

5,00,000

b) Trade Receivables

6,00,000

4,00,000

c) Cash and cash equivalents

4,00,000

3,00,000

Total

 24,70,000

19,50,000

Additional Information:
Depreciation Charge on Plant amount to ₹. 80,000.

Answer - 21 : -


Cash Flow Statement

for the year ending March 31, 2015

Particulars

Details

(₹)

Amount

(₹)

A.

Cash from Operating Activities

Net Profit

2,20,000

Items to be Added:

Interest on Debentures

48,000

Depreciation on Fixed Assets

80,000

Goodwill Written-off

80,000

2,08,000

Operating Profit before Working Capital Adjustments

4,28,000

Add: Increase in Current Liabilities

Creditors

3,00,000

Less: Increase in Current Assets

Inventories

(1,00,000)

Trade Receivables

(2,00,000)

Cash Generated from Operations

4,28,000

Less: Tax Paid

Net Cash From Operating  Activities 

4,28,000

B.

Cash From Investing Activities

Purchase of Fixed Assets (WN)

(2,80,000)

Net Cash From Investing Activities

(2,80,000)

C.

Cash From Financing Activities

Issue of Share Capital

2,00,000

Redemption of Debentures

(2,00,000)

Interest Paid on Debentures

(48,000)

(48,000)

Net Cash From Financing Activities (C)

(48,000)

Net Increase in Cash (A + B + C)

1,00,000

Add: Opening Cash and Cash Equivalents

3,00,000

Closing Cash and Cash Equivalents

4,00,000

WorkingNote:

Fixed Assets Account

Dr.

Cr.

Particulars

J.F.

Amount

(₹)

Particulars

J.F.

Amount

(₹)

Balance b/d

5,00,000

Depreciation

80,000

Purchases (Balancing Figure)

2,80,000

Balance c/d

7,00,000

7,80,000

7,80,000

Question - 22 : - From the following Balance Sheet of Yogeta Ltd., prepare cash flow statement:

Particulars

Note No.

31st March
2017
(₹)

31st March
2016
(₹)

I) Equity and Liabilities

1. Shareholders’ Funds

a) Share capital

1

4,00,000

2,00,000

b) Reserves and surplus-Surplus

2,00,000

1,00,000

2. Non-current Liabilities

a) Long-term borrowings

2

1,50,000

2,20,000

3. Current Liabilities

a) Short-term borrowings

1,00,000

(Bank overdraft)

b) Trade payables

70,000

50,000

c) Short-term provision

50,000

30,000

(Provision for taxation)

Total

9,70,000

6,00,000

II) Assets

1. Non-current assets

a) Fixed assets

i) Tangible

7,00,000

4,00,000

2. Current assets

a) Inventories

1,70,000

1,00,000

b) Trade Receivables

1,00,000

50,000

c) Cash and cash equivalents

50,000

Total

 9,70,000

6,00,000

Notes to Accounts

Particulars

31st March
2017
(₹)

31st March
2016
(₹)

1. Share capital

a) Equity share capital

3,00,000

2,00,000

b) Preference share capital

1,00,000

4,00,000

2,00,000

2. Long term borrowings

Long-term loan

2,00,000

Long-term Rahul

1,50,000

20,000

1,50,000

2,20,000

Additional Information:
Net Profit for the year after charging ₹. 50,000 as Depreciation was ₹. 1, 50,000. Dividend paid on Share was ₹. 50,000, Tax Provision created during the year amounted to ₹. 60,000.

Answer - 22 : -

Cash Flow Statement of Yogeta Ltd.

Particulars

Amount

Amount

A.

Cash Flow from Operating Activities

Profit as per Balance Sheet (2,00,000 –1,00,000)

1,00,000

Proposed Dividend

50,000

Provision for Taxation

60,000

Net Profit before Taxation and Extraordinary items

2,10,000

Items to be added:

Depreciation

50,000

50,000

Operating Profit before Working Capital changes

2,60,000

Add: Increase in Current liabilities

Trade Payable

20,000

20,000

2,80,000

Less: Increase in Current Assets

Inventories

(70,000)

Trade Receivable

(50,000)

(1,20,000)

Cash Generated from Operating Activities

1,60,000

Less: Income Tax paid

(40,000)

Net Cash from Operations

1,20,000

B.

Cash Flow from Investing Activities

Purchases of Fixed Assets

(3,50,000)

Net Cash used in Investing Activities

(3,50,000)

C.

Cash Flow from Financing Activities

Issue of Equity Shares

1,00,000

Issue of Preference Shares

1,00,000

Loan from Rahul

1,30,000

Less: Repayment of Loan

(2,00,000)

Dividend Paid

(50,000)

Net Cash from Financing Activities

80,000

D.

Net decrease in Cash and Cash Equivalent (A+B+C)

(1,50,000)

Add: Cash and Cash Equivalents in the beginning

50,000

E.

Cash and Cash Equivalents at the end (Bank Overdraft)

(1,00,000)

WorkingNotes:

1.

Provision for Taxation Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

Date

Particulars

J.F.

Amount

Bank (Balancing figure)

40,000

Balance b/d

30,000

Balance c/d

50,000

Profit and Loss

60,000

90,000

90,000

2.

Fixed Assets Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

Date

Particulars

J.F.

Amount

Balance b/d

4,00,000

Depreciation

50,000

Bank

3,50,000

Balance c/d

7,00,000

7,50,000

7,50,000

Question - 23 : - Following is the Financial Statement of Garima Ltd., prepare cash flow statement.

Particulars

Note No.

31st March
2017
(₹)

31st March
2016
(₹)

I) Equity and Liabilities

1. Shareholders’ Funds

a) Share capital

1

4,40,000

2,80,000

b) Reserve and surplus-Surplus

2

40,000

28,000

2. Current Liabilities

a) Trade payables

1,56,000

56,000

c) Short-term provisions

12,000

4,000

(Provision for taxation)

Total

6,48,000

3,68,000

II) Assets

1. Non-current assets

a) Fixed assets

i) Tangible

3,64,000

2,00,000

2. Current assets

a) Inventories

1,60,000

60,000

b) Trade receivables

80,000

20,000

c) Cash and cash equivalents

28,000

80,000

d) Other current assets

16,000

8,000

Total

 6,48,000

3,68,000

Notes to Accounts

Particulars

31st March
2017
(₹)

31st March
2016
(₹)

1. Share capital

a) Equity share capital

3,00,000

2,00,000

b) Preference share capital

1,40,000

80,000

4,40,000

2,80,000

2. Reserve and surplus

Surplus in statement of profit and loss at the beginning of the year

28,000

Add: Profit of the year

16,000

Less: Dividend

4,000

Profit at the end of the year

40,000

Additional Information:
1. Interest paid on Debenture ₹ 600
2. Dividend paid during the year ₹ 4,000
3. Depreciation charged during the year ₹ 32,000

Answer - 23 : -


Cash Flow Statement (Indirect Method)

Particulars

Amount

Amount

A.

Cash Flow from Operating Activities

Profit as per Balance Sheet  (40,000 – 28,000)

12,000

Proposed Dividend

4,000

Provision for Taxation

12,000

Net Profit before Taxation and Extraordinary items

28,000

Items to be added:

Interest paid on Debentures

600

Depreciation

32,000

32,600

Operating Profit before Working Capital changes

60,600

Add: Increase in Current liabilities

Trade Payables

1,00,000

Less: Increase in Current Assets

Other Current Assets

(8,000)

Inventories

(1,00,000)

Trade Receivables

(60,000)

(68,000)

Cash generated from Operating Activities

(7,400)

Less: Income Tax paid

(4,000)

Net Cash used in Operating Activities

(11,400)

B.

Cash Flow from Investing Activities

Purchase of Fixed Assets

(1,96,000)

Net Cash used in Investing Activities

(1,96,000)

C.

Cash Flow from Investing Activities

Issue of Equity Shares

1,00,000

Issue of Preference Shares

60,000

    Less: Interest Paid on Debentures

(600)

Less: Dividend Paid

(4,000)

Net Cash from Financing Activities

1,55,400

D.

Net decrease in cash and cash equivalent (A+B+C)

(52,000)

Add: Cash and Cash Equivalents in the beginning

80,000

E.

Cash and Cash Equivalents at the end

28,000

Working Notes:

Plant and Machinery Account

Dr.

Cr.

Date

Particulars

J.F.

Amount

Date

Particulars

J.F.

Amount

Balance b/d

2,00,000

Depreciation

32,000

Bank (Purchases- Balancing fig.)

1,96,000

Balance c/d

3,64,000

3,96,000

3,96,000

Question - 24 : - From the following Balance Sheet of Computer India Ltd., prepare cash flow statement.

(₹ in ‘000)

Particulars

Note No.

31st March
2017
(₹)

31st
March
2016
(₹)

I) Equity and Liabilities

1. Shareholders’ Funds

a) Share capital

50,000

40,000

b) Reserves and surplus-Surplus

1

3,700

3,000

2. Non-Current Liabilities

10% Debentures

6,500

6,000

3. Current Liabilities

a) Short-term borrowings

2

6,800

12,500

b) Trade payables

11,000

12,000

c) Short-term provisions

3

10,000

8,000

Total

88,000

81,500

II) Assets

1. Non-current assets

a) Fixed assets

4

25,000

30,000

2. Current assets

a) Inventories

35,000

30,000

b) Trade receivables

24,000

20,000

c) Cash and cash equivalents-cash

3,500

1,200

d) Other current assets-prepaid exp.

500

300

Total

 88,000

81,500

Notes to Accounts

Particulars

31st March

2017

(₹)

31st
March2016

(₹)

1.

Reserve and surplus

(i) Balance in statement of profit and loss

1,200

1,000

(ii) General reserve

2,500

2,000

3,700

3,000

2.

Short-term borrowings

Bank Overdraft

6,800

12,500

3.

Short-term provisions

(i) Provision for taxation

4,200

3,000

(ii) Proposed dividend

5,800

5,000

10,000

8,000

4.

Fixed Assets:

  Fixed Assets

40,000

41,000

  Less: Accumulated Depreciation

(15,000)

(11,000)

25,000

30,000

Additional Information:
Interest paid on Debenture ₹. 600

Answer - 24 : -

Cash Flow Statement of Computer India Ltd. 

(‘00,000)

Particulars

Amount

Amount

A.

Cash Flow from Operating Activities

Profit as per Balance Sheet (1,200 – 1,000)

200

Proposed Dividend

5,800

General Reserve

500

Provision for Taxation

4,200

Net Profit before Tax and Extraordinary items

10,700

Items to be added

Provision for Depreciation

4,000

Interest paid on Debentures

600

4,600

Operating Profit before Working Capital changes

15,300

Adjustments

Less:

Increase in Current Assets

Trade Receivables

(4,000)

Inventories

(5,000)

Prepaid Expenses

(200)

(9,200)

6,100

Less:

Decrease in Current Liabilities

Trade Creditors

(1,000)

(1,000)

Cash generated from Operating Activities

5,100

Less:

Income Tax Paid

(3,000)

Net Cash from Operation

2,100

B.

Cash Flow from Investing Activities

Sale of Fixed Assets

1,000

Net Cash from Investing Activities

1,000

C.

Cash Flow from Financing Activities

Issue of Equity Shares

10,000

Issue of 10% Debentures

500

Less:

Dividend paid

(5,000)

Less:

Interest paid

(600)

Net Cash from Financing Activities

4,900

D.

Net Increase in Cash and Cash Equivalent (A+B+C)

8,000

Add:

Cash and Cash Equivalent in the beginning

Cash

1,200

Bank overdraft

(12,500)

(11,300)

E.

Cash and Cash Equivalents at the end

Cash

3,500

Bank overdraft

(6,800)

(3,300)

 

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