Question

From the following Balance Sheet of Akshya Ltd. as on 31-3-2012 and 31-3-2013, prepare a Cash Flow Statement.
$\begin{array}{ccccc}& \text{Particulars}& \text{Note}& 31-3-2013& 31-3-2012\\ & & \text{No.}& \text{(Rs)}& \text{(Rs)}\\ \text{I.}& \text{Equity and Liabilities}& & & \\ & \left(1\right)\text{Shareholders' Funds}& & & \\ & \text{(a) Share Capital}& & 65,000& 45,000\\ & \text{(b) Reserve and Surplus}& 1& 42,500& 24,000\\ & \left(2\right)\text{Current Liabilities}& & & \\ & \text{Trade Payables (Creditors)}& & 11,000& 8,700\\ & \text{Total}& & 1,18,500& 77,700\\ \text{II.}& \text{Assets}& & & \\ & \left(1\right)\text{Non-current Assets}& & & \\ & \text{(a) Fixed Assets}& & 83,000& 46,700\\ & \left(2\right)\text{Current Assets}& & & \\ & \text{(a) Inventories (Stock)}& & 13,000& 11,000\\ & \text{(b) Trade Receivables (Debtors)}& & 19,500& 18,000\\ & \text{(c) Cash and Cash Equivalents (Cash)}& & 3,000& 2,000\\ & \text{Total}& & 1,18,500& 77,700\end{array}$

Notes to Accounts :
$\begin{array}{ccccc}\text{Note}& \text{Particulars}& & \text{31st March, 2013}& \text{31st March, 2012}\\ \text{No.}& & & \text{(Rs)}& \text{(Rs)}\\ \text{1}& \text{Reserves and Surplus}& & & \\ & \text{General Reserves}& & 27,500& 15,000\\ & \text{Balance in Statement of Profit and Loss}& & 15,000& 10,000\\ & \text{Preliminary Expenses}& & \underset{–}{}& (1,000)\\ & \text{Total}& & 42,500& 24,000\end{array}$

Additional Information :

(i) Depreciation on Fixed Assets for the year 2012-13 was Rs 14,700.

(ii) An interim dividend Rs 7,000 has been paid to the shareholders during the year.

Answer 1

CASH FLOW STATEMENT
for the year ending 31st March, 2013
$\begin{array}{ccccc}& \text{Particulars}& & \text{Amount}& \text{Amount}\\ & & & \text{(Rs)}& \text{(Rs)}\\ \text{A.}& \text{Cash Flows from Operating Activities}& & & \\ & \text{Net Profit before tax (WN.1)}& & 24,500& \\ & \text{Add:}\text{Depreciation on Fixed Assets}& & 14,700& \\ & \text{Write off Preliminary Expenses}& & \underset{–}{1,000}& \\ & \text{Operating Profit before Working Capital changes}& & & 40,200\\ & \text{Less :}\text{Increase in Current Assets :}& & & \\ & \text{Stock}& & 2,000& \\ & \text{Debtors}& & \underset{–}{1,500}& \underset{–}{(3,500)}\\ & & & & 36,700\\ & \text{Add :}\text{Increase in Current Liabilities :}& & & \\ & \text{Trade Creditors}& & & 2,300\\ & \text{Cash Flow from Operating Activities}& & & \underset{–}{\overline{39,000}}\\ \text{B.}& \text{Cash Flow from Investing Activities}& & & \\ & \text{Purchase of Fixed Assets (WN.2)}& & \underset{–}{(51,000)}& \\ & \text{Net Cash used in Investing Activities}& & & \underset{–}{\overline{(51,000)}}\\ \text{C.}& \text{Cash Flow from Financing Activities}& & & \\ & \text{Issue of Shares}& & 20,000& \\ & \text{Payment of Interim Dividend}& & \underset{–}{(7,000)}& \underset{–}{13,000}\\ & \text{Net Cash Flow from Financing Activities}& & & 13,000\\ \text{D.}& \text{Net increase in Cash and Cash Equivalents (A + B + C)}& & & 1,000\\ \text{E.}& \text{Add :}\text{Opening Balance of Cash and Cash Equivalents}& & & 2,000\\ \text{F.}& \text{Closing Balance of Cash and Cash Equivalents}& & & \overline{3,000}\end{array}$

Working Notes :

$\text{1. Calculation of Net Profit before Tax :}\text{Net Profit as per Statement of Profit and Loss (Rs. 15,000 - Rs. 10,000)}5,000\text{Add: Transfer to General Reserve (Rs. 27,500 - Rs. 15,000)}12,500\text{Interim Dividend paid during the year}\underset{–}{7,000}\text{Net Profit before Tax}\underset{–}{24,500}$

2.
Dr. FIXED ASSETS ACCOUNT Cr.
$\begin{array}{cccc}\text{Particulars}& \text{Amount}& \text{Particulars}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{To Balance b/d}& 46,700& \text{By Depreciation A/c}& 14,700\\ \text{To Bank A/c (Purchase) (Balancing figure)}& \underset{–}{51,000}& \text{By Balance c/d}& \underset{–}{83,000}\\ & 97,700& & 97,700\end{array}$