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Following is the Balance Sheet of Oswal Publications as at 31-03-2018.

ParticulrsNote31-03-201731-03-2016No. Rs RsI. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital7,00,0006,00,000 (b) Reserve and Surplus2,00,0001,10,000 (2) Non-current Liabilities: (a) Long-term Borrowings3,00,0002,00,000 (3) Current Liabilities: (a) Trade Payables 30,000 25,000 Total12,30,0009,35,000II. ASSETS (1) Non-current Assets: (a) Fixed Assets11,00,0008,00,000 (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 Total12,30,0009,35,000

Additional Information :

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

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Solution

CASH FLOW STATEMENT
for the year ending 31-3-2018
ParticularsAmountAmount(Rs)(Rs)A. Cash Flow from Operating ActivitiesProfit before Tax(2,00,000-1,10,000)90,000Adjustment of non-cash and non-operating items+ Depreciation2,00,000+ Loss on sale of machinery15,000Operating Profit before Working Capital Changes3,05,000+ Increase in Trade Payables5,000+ Decrease in Trade Receivables8,000(-) Increase in Inventories(10,000)Cash generated from Operating Activities (A)3,08,000(-) Tax PaidNet Cash from Operating activities3,08,000B. Cash Flow from Investing ActivitiesPurchase of Machinery(5,80,000)Sale of Machinery65,000Net Cash used in Investing Activities (B)(5,15,000)C. Cash Flow from Financing ActivitiesPreoceeds from issue of shares1,00,000 Proceeds from long-term borrowings1,00,000Net Cash fromFinancing Activities (C)2,00,000Net decrease in Cash and Cash equivalents (A+B+B)(7,000)+ Cash and Cash equivalents at the beginning35,000Cash and cAsh equivalents at the end28,000

Working Notes :

MACHINERY ACCOUNT
ParticularsAmount ParticularsAmount(Rs)(Rs)To Balance b/d8,00.000By Depreciation A/c2,00,000To Bank A/c (Purchase ) Balanceing Fig.5,80,000By Banking A/c (Sale)65,000By Profits and Loss A/c15,000By Balance c/d11,00,000 Total13,80,000 Total13,80,000


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Q.

Following are the Balance Sheets of X Ltd. for two years. Prepare a Cash Flow statement:
ParticularsNote3103201831032017No.(I) Equity and Liabilities: (1) Shareholder's Fund: (a) Share Capital3,00,0002,00,000 (b) Reserve and surplus80,00030,000 (2) Non- Current Liabilities: Long term Borrowings175,000 (3) Current Liabilities: (a) Short term Borrowings225,00037,000 (b) Trade Payables1,50,00096,000 (c) Short term (Provision for Tax)15,000––––––12,000–––––– Total 5,70,000––––––––4,50,000––––––––II. Assets: (1) Non - Current Assets: Fixed Assets33,40,0003,00,000 (2) Current Assets (a) Current Investments (Short-term Investments)30,00020,000 (b) Inventory90,00060,000 (c) Trade Receivables97,00065,000 (d) Cash and Cash Equivalents13,000––––––5,000–––– Total5,70,000––––––––4,50,000––––––––
Notes:
(1) Long - term Borrowings:310320183103201715% Loan- 75,000(2)Short-term Borrowings:Bank Overdraft25,000––––––37,000––––––(3)Fixed Assets:Plant and Machinery4,00,0003,50,000()Accumulated Depreciation60,000––––––50,000––––––3,40,000––––––––3,00,000––––––––
Additional Information:

(1) 3103201831032017Rs.Rs.Contingent Liability:Proposed Dividend30,00020,000
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Q.

From the following balance sheets of ABC Ltd., Find out cash from operating activities only:
ParticularsNote No.3103201731032016I. Equity and Liabilities: (1) Shareholder's Funds: (a) Share Capital35,00030,000 (b) Reserve and Surplus122,0003,500 (2) Non - Current Liabilities Long term Borrowings225,00021,000 (3) Current Liabilities Trade Payables12,500––––––8,500––––Total94,500––––––63,000––––––II. Assets: (1) Non- Current Assets: (a)Fixed Assets (i)Tangible Assets341,00032,000 (ii)Intangible Assets48,00010,000 (b) Non Current Investments58,0003,000 (2) Current Assets: (a) Inventory24,5006,000 (b) Cash and Cash Equivalents13,000––––––12,000––––––Total94,500––––––63,000––––––
Notes:
(1)Reserve and Surplus:20172016General Reserve15,0009,500Profit and Loss Balance7,000––––(6,000)––––––22,000––––––3,500––––Bracket Denotes negative balance.(2)Long- term Borrowings:10% Debentures25,000––––––21,000––––––(3)Tangible Assets:Machinery54,00041,000() Provision for Depreciation13,000––––––9,000––––41,000––––––32,000––––––(4)Intangible Assets:Goodwill8,000––––10,000––––––(5)Rate of interest on Investments is 10% p.a.

Additional Information:
1. Debentures were issued on 31.3.2017
2. Investments were made on 31.3.2017

Q.

Gujarat Spinning Mills Ltd. faced the acute shortage of trained manopower. Other companies in the same trade were also facing the same problem. After consultation with one another, they set up a institute for technical training where training was imparted to unemployed youth to make them ready for employment. Following are the balance sheets of the company;

ParticularsNote31-03-201831-03-2017No.Rs.Rs.I. Equity and Liabilities: (1) Shareholder's Fund: (a) Share Capital5,00,0004,00,000 (b) Reserve and Surplus13,05,0002,10,000 (2) Non- Current Liabilities: Long term Borrowings23,10,0003,00,000 (3) Current Liabilities: Trade Payables95,000––––––80,000–––––– Total12,10,000–––––––––9,90,000––––––––II. Assets (1) Non- Current Assets: (a) Fixed Assets7,00,0005,00,000 (b) Non- Current Investments56,00070,000 (2) Current Assets: (a) Inventory2,80,0002,10,000 (b) Trade Receivables31,14,0001,40,000 (c) Cash and Cash Equivalents60,000––––––70,000–––––– Total12,10,000–––––––––9,90,000––––––––

Notes:
3103201831032017Rs. Rs. (1)Reserve and Surplus: General Reserve1,15,0001,00,000 Profit and Loss Balance1,90,000––––––––1,10,000––––––––3,05,000––––––––2,10,000––––––––(2)Long term Borrowings: 12%Debentures1,50,0002,00,000 14%Mortgage Loan1,60,000––––––––1,00,000––––––––3,10,000––––––––3,00,000––––––––(3) Trade Receivables: Sundry Debtors94,0001,25,000 Bills Receivables20,000––––––15,000––––––1,14,000––––––––1,40,000––––––––
Total interest Paid on Long - term Borrowings during the year amounted to Rs. 37,800.
You are required to prepare a cash flow statement.

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