Question

Following is the Balance Sheet of Fine Products Ltd. as at 31st March, 2019:

Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital: Equity Share Capital		3,50,000	3,00,000
(b) Reserves and Surplus	1	57,000	38,000
2. Current Liabilities
(a) Trade Payables		53,000	35,000
(b) Other Current Liabilities		6,000	8,000
(c) Short-term Provisions	2	32,000	28,000
Total		4,98,000	4,09,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(i) Tangible Assets	3	2,48,000	2,00,000
(ii) Intangible Assets (Goodwill)		40,000	50,000
(b) Non-Current Investments		35,000	10,000
2. Current Assets
(a) Inventories		39,000	57,000
(b) Trade Receivables		1,08,000	75,000
(c) Cash and Bank Balance		28,000	17,000
Total		4,98,000	4,09,000

Notes to Accounts

Particulars	31st March, 2019 (₹)	31st March, 2018 (₹)
1. Reserves and Surplus
General Reserve	30,000	20,000
Surplus, i.e., Balance in Statement of Profit and Loss	27,000	18,000
	57,000	38,000
2. Short-term Provisions
Provision for Tax	32,000	28,000
3. Tangible Fixed Assets
Land and Building	57,000	1,10,000
Plant and Machinery	1,91,000	90,000
	2,48,000	2,00,000

Note: Proposed dividends on equity for the years ended 31st March, 2018 and 2019 are ₹ 39,000 and ₹ 45,000 respectively.

You are required to prepare Cash Flow Statement for the year ended 31st March, 2019.

Answer 1

Cash Flow Statement for the year ended March 31, 2019
	Particulars		Amount (₹)	Amount (₹)
A	Cash Flow from Operating Activities
	Profit as per Statement of Profit and Loss			9,000
	Items to be Added:
	General Reserve		10,000
	Goodwill		10,000
	Provision for Taxation		32,000
	Proposed Dividend		39,000	1,00,000
	Operating Profit before Working Capital Adjustments			1,00,000
	Less: Increase in Current Assets
		Trade Receivables	(33,000)
	Less: Decrease in Current Liabilities
	Other Current Liabilities		(2,000)
	Add:Decrease in Current Assets
	Inventories		18,000
	Add:Increase in CurrentLiabilities
	Trade Payables		18,000	1,000
	Cash Generated from Operations			1,01,000
	Less: Tax Paid			(28,000)
	Net Cash Flows from Operating Activities			73,000
B	Cash Flow from Investing Activities
	Purchase of Non-Current Investments			(25,000)
	Purchase of Plant & Machinery			(1,01,000)
	Sale of Land & Building			53,000
	Net Cash Used in Investing Activities			(73,000)
C	Cash Flow from Financing Activities
	Dividend Paid			(39,000)
	Proceeds from Issue of Share Capital			50,000
	Net Cash Flow from Financing Activities			11,000
D	Net Increase or Decrease in Cash and Cash Equivalents			11,000
	Add: Cash and Cash Equivalent in the beginning of the period			17,000
	Cash and Cash Equivalents at the end of the period			28,000

Note: Proposed Dividend treatment is as per AS-4 (Revised).