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Question

Following is the Financial Statement of Garima Ltd., prepare cash flow statement.

Particulars Note No. 31st March
2017
(Rs)
31st March
2016
(Rs)
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
(Rs)
31st March
2016
(Rs)
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 Rs 600
  2. Dividend paid during the year Rs 4,000
  3. Depreciation charged during the year Rs 32,000

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Solution

Cash Flow Statement (Indirect Method)

Particulars

Amount

Rs

Amount

Rs

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

Rs

Date

Particulars

J.F.

Amount

Rs

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


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Q. Following is the financial statement of Garima Ltd., prepare cash flow statement.
Balance Sheet
As on 31st December, 2011
Capital and Liabilities2010 (Rs.)2011 (Rs.)Assets2010 (Rs.)2011 (Rs.)Equity Share Capital2,00,0003,00,000Plant and Machinery2,00,0003,64,000Preference Share Capital80,0001,40,000Stock60,0001,60,000Creditors56,0001,56,000Debtors20,00080,000Provision for Taxation4,00012,000Bank80,00028,000Profit & Loss Account28,00040,000Prepaid Expenses8,00016,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 3,68,000––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 6,48,000–––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 3,68,000––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 6,48,000–––––––––

Profit and Loss Account
for the year ended December 31, 2011

ParticularsAmt. (Rs.) ParticularsAmt. (Rs.)Opening Stock60,000Sales5,00,000Purchase4,92,000Closing Stock1,60,000Gross Profit c/d1,08,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 6,60,000–––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 6,60,000–––––––––Salary44,000Gross Profit b/d1,08,000Depreciation32,000Provision for Tax16,000Net Profit c/d16,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 1,08,000–––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 1,08,000–––––––––Dividend4,000Balance b/d28,000Balance c/d40,000Net Profit b/d16,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 44,000––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ 44,000––––––––
Q.

From the following Balance Sheet and information of Sun Ltd., prepare Cash Flow Statement:

Particulars ulars
Note No.
31st March, 2019
(₹)
31st March, 2018
(₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital
1 7,00,000 6,00,000
(b) Reserves and Surplus
2 4,10,000 2,00,000
2. Non-Current Liabilities
Long-term Borrowings: 10% Debentures
3,00,000 2,00,000
3. Current Liabilities
(a) Trade Payables
1,40,000 60,000
Total Total Expenses
15,50,000 10,60,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets−Tangible
7,00,000 6,00,000
(b) 10% Investments
2,00,000 1,00,000
2. Current Assets
(a) Current Investments
90,000 50,000
(b) Inventories
2,00,000 1,00,000
(c) Trade Receivables
3 2,80,000 1,90,000
(d) Cash and Cash Equivalents
80,000 20,000
Total
15,50,000 10,60,000
Notes to Accounts :
Particulars
31st March,
2019
(₹)
31st March,
2018
(₹)
1. Share Capital
Equity Share Capital
5,00,000
3,00,000
10% Preference Share Capital
2,00,000
3,00,000
7,00,000
6,00,000
2. Reserves and Surplus
Securities Premium Reserve
10,000
...
Surplus i.e., Balance in Statement of Profit and Loss
4,00,000
2,00,000
4,10,000
2,00,000
3. Trade Receivables
Sundry Debtors
3,00,000
2,00,000
Less: Provision for Doubtful Debts
20,000
10,000
2,80,000
1,90,000
You are informed that during the year:
(i) Proposed Dividend: 31st March, 2019 31st March, 2018
Equity Share Capital Nil Nil
Preference Share Capital 10% 10%

(ii) A machine with a book value of ₹ 90,000 was sold for ₹ 50,000;
(iii) Depreciation charged during the year ₹ 60,000;
(iv) Debentures were issued on 1st April, 2018;
(v) Investments were purchased on 31st March, 2019;
(vi) Preference shares were redeemed on 31st December,2018;
(vii) An interim dividend @ 15% was paid on equity shares on 31st December, 2018;
(viii) Fresh equity shares were issued at a premium of 5% on 31st March, 2019.
Q.

From the following Balance Sheet of Mishi Ltd. as at 31st March, 2019, prepare Cash Flow Statement:

Particulars ulars
Note No.
31st March, 2019
(₹)
31st March, 2018
(₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital
16,00,000 12,00,000
(b) Reserves and Surplus
1 6,60,000 4,40,000
2. Non-Current Liabilities
Long-term Borrowings (10% Debentures)
3,20,000 2,00,000
3. Current Liabilities
(a) Short-term Borrowing (Bank Loan)
80,000 1,10,000
(b) Trade Payables
1,50,000 1,80,000
Total Total Expenses
28,10,000 21,30,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets−Tangible
2 19,00,000 12,10,000
(b) Non-Current Investments
2,70,000 2,00,000
2. Current Assets
(a) Current Investments
1,60,000 80,000
(b) Trade Receivables
1,80,000 4,00,000
(c) Cash and Cash Equivalents
3 3,00,000 2,40,000
Total
28,10,000 21,30,000

Notes to Accounts :
Particulars
31st March,
2019
(₹)
31st March,
2018
(₹)
1. Reserves and Surplus :
Securities Premium Reserve
20,000
...
General Reserve
3,00,000
2,40,000
Surplus i.e., Balance in the Statement of Profit and Loss
3,40,000
2,00,000
6,60,000
4,40,000
2. Fixed Assets−Tangible
Machinery (Cost)
21,40,000
14,00,000
Less: Accumulated Depreciation
2,40,000
1,90,000
19,00,000
12,10,000
3. Cash and Cash Equivalents
Cash in Hand
1,40,000
1,10,000
Bank Balance
1,60,000
1,30,000
3,00,000
2,40,000

Additional Information :
(i) During the year, Machinery costing ₹ 1,40,000 (accumulated depreciation provided thereon ₹ 1,10,000) was sold for ₹ 20,000.
(ii) During the year, Non-current Investments costing ₹ 80,000 were sold at a profit of ₹ 16,000.

Q.

From the following Balance Sheet of Samta Ltd., as at 31st March, 2019, prepare Cash Flow Statement:

Particulars ulars

Note No.
31st March, 2019
(₹)
31st March,
2018
(₹)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital
1 7,50,000 7,50,000
(b) Reserves and Surplus
2 3,10,000 (20,000)
2. Non-Current Liabilities
Long-term Borrowings (8% Debentures)
2,60,000 1,50,000
3. Current Liabilities
(a) Short-term Borrowings (8% Bank Loan)
40,000 50,000
(b) Trade Payables
1,20,000 1,10,000
(c) Short-term Provisions
3 50,000 40,000
Total Total Expenses
15,30,000 10,80,000
II. ASSETS
1. Non-Current Assets
(a) Fixed Assets:
(i) Tangible Assets (Net)
8,60,000
6,20,000
(ii) Intangible Assets (Goodwill)
15,000 40,000
(b) Non-Current Investments
1,25,000 80,000
2. Current Assets
(a) Current Investments
5,000 15,000
(b) Inventories
1,95,000 1,00,000
(c) Trade Receivables
2,00,000 2,00,000
(d) Cash and Cash Equivalents
1,30,000 25,000
Total
15,30,000 10,80,000

Notes to Accounts

Particulars

31st March, 2019

(₹)

31st March, 2018

(₹)

1. Share Capital
Equity Share Capital

5,50,000

4,50,000

12% Preference Share Capital

2,00,000

3,00,000

7,50,000

7,50,000

2. Reserves and Surplus
Securities Premium Reserve

10,000

...

General Reserve

1,50,000

1,20,000

Surplus, i.e., Balance in Statement of Profit and Loss

1,50,000

(1,40,000)

3,10,000

(20,000)

4. Short-term Provisions
Provision for Tax

50,000

40,000

Additional Information :
(i) During the year a piece of machinery costing ₹ 60,000 on which depreciation charged was ₹ 20,000 was sold at 50% of its book value. Depreciation provided on tangible Assets ₹ 60,000;
(ii) Income tax ₹ 45,000 was provided;
(iii) Additional Debentures were issued at par on 1st October, 2018 and Bank Loan was repaid on the same date;
(iv) At the end of the year Preference Shares were redeemed at a premium of 5%.
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