Question

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

BALANCE SHEET
as at 31st March, 2017

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

Notes to Accounts

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

Note: Proposed Dividend for the years ended 31st March, 2016 and 2017 are ₹ 50,000 and ₹ 75,000 respectively.
Additional Information: ₹ 1,00,000, 10% Debentures were issued on 31st March, 2017.

Answer 1

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

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